The ATO has launched project Super Scheme Smart to educate taxpayers and advisors about tax schemes involving SMSFs.
“Each year we discover complex tax schemes and arrangements designed by promoters solely for the purpose of helping people avoid tax,” says the ATO.
The tax office says it is currently seeing a number of schemes targeting Australians planning for retirement, with these people being encouraged to “inappropriately” channel money through SMSFs.
“The penalties are substantial for those involved in deliberate tax avoidance schemes,” said the ATO.
“And the penalties aren’t just financial; an individual may well lose their right to be a trustee of their own superannuation fund; or in some cases they could go to jail. Promoters of these schemes are also on our watch list.”
The ATO says that these schemes have some common features, as they:
- are artificially contrived with complex structures usually connecting with an existing or newly created SMSF
- involve a significant amount of paper shuffling
- are designed to give the taxpayer minimal or zero tax, or even a tax refund
- aim to give a present day tax benefit by adopting the arrangement
- invariably sound ‘too good to be true’, and as such they generally are.
Super Scheme Smart endorsed by SMSFA
The SMSF Association has endorsed Super Scheme Smart with its full support.
SMSF Association CEO John Maroney said: “We are highly supportive of the clarity that the ATO material provides on issues and risk areas that are causing concern for SMSF advisors and trustees alike. It outlines vital information and specific illegal retirement planning schemes to help people make the right decision on how to manage their superannuation and avoid these schemes.”
“We think this is an excellent initiative by the ATO to build education and awareness about risks regarding illegal retirement planning scheme. While we know the vast majority of SMSF members are trying to swim between the flags, it can be easy to be caught up in an illegal scheme without the right information or advice at hand.”
“Education and awareness is always the first step in curbing the influence of illegal arrangements and we look forward to further clarity and updates from the ATO when issues arise in the future.”