The Australian Taxation Office (ATO) is warning self-managed superannuation fund (SMSF) trustees and retirees about the risks found in some emerging retirement planning arrangements designed to help people avoid tax.
James O’Halloran, the ATO’s deputy commissioner of superannuation, said the ATO acknowledges that most people do the right thing and save hard for their retirement. However, if taxpayers become involved in any illegal activities, even by accident, they may incur severe penalties that would jeopardise their retirement savings. They could also risk losing their rights as trustees to manage their own funds.
To educate taxpayers and their advisers about schemes designed solely for tax avoidance, the ATO has introduced its Super Scheme Smart program. Included in the program are case studies and information packs to ensure taxpayers and their advisers are well-informed about illegal arrangements.
“We are working hard to shut down illegal arrangements quickly, but the best defence for taxpayers and their advisers is to be aware,” O’Halloran said. “Promoters of the arrangements may overtly target SMSF trustees and self-funded retirees, including small business owners and those involved in property development with significant assets.
“The arrangements may be cleverly disguised to look legitimate, involve a lot of paper shuffling and framed as being designed to give a taxpayer a minimal or zero amount of tax or even a tax refund or concession.
“Just because an arrangement is structured in a way which appears to satisfy certain regulatory rules does not mean it is legal. Such arrangements can put SMSFs at significant risk of breaching the superannuation regulatory rules as well as the taxation law.”
If you have information about these arrangements or would like to make a voluntary disclosure, please call 1800 060 062 or email reportataxscheme@ato.gov.au.
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