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SMSF News

SMSF News

  • Thursday, 26 December 2019 15:09

COURT SHUTS DOWN ILLEGAL SMSF PROMOTER

A Federal Court has imposed a $220,000 penalty and a seven-year ban for the promoter of an illegal early release of super scheme using self-managed super funds (SMSFs).

The ATO commenced action against a New South Wales woman in 2018 after a third-party provider shared concerns about the suspect establishment of several SMSFs.

The scheme’s operator had set up, or intended to set up, 35 SMSFs on behalf of 68 individuals between 2016 and 2018. She then helped the individuals – who were not yet legally entitled to access their super – transfer their balances to the SMSF so they could withdraw it, sometimes as soon as the same day.

The outcome marks the first time the ATO, as regulator of the SMSF sector, has used provisions in the Superannuation Industry (Supervision) Act 1993 to take action against a promoter of an illegal early release of super scheme.

The judgment sends a strong message that the ATO will not tolerate promoters who undermine the integrity of Australia’s tax and super system. The illegal early release of super causes long-term financial damage to individuals leaving them with little, if any, super for their retirement and a significant tax bill on the amount withdrawn.

There are severe consequences for you and your fund if you access your super before you are legally entitled to do so. These could include:

  • disqualification of trustees;
  • the fund being made non-complying;
  • administrative penalties;
  • winding up the SMSF; and
  • prosecution.

If any of your members have been involved in a scheme, contact the ATO immediately on 13 10 20.

 

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