In like vein to yesterday’s post on early withdrawal of super, the ATO has recently released a media alert warning people to beware of shonky schemes:
The Tax Office has warned people from non-English speaking backgrounds to beware of schemes offering access to superannuation benefits before retirement.
Deputy Tax Commissioner Raelene Vivian said schemes offering early access to superannuation for a fee are illegal and anyone involved faces the loss of their super benefits, legal penalties and a hefty tax bill.
“We have detected promoters offering early access schemes to people from non-English speaking backgrounds in western Sydney.
“Anyone who is offered a scheme which, for a fee, arranges access to their superannuation before they retire, should contact the Tax Office on 13 10 20 without delay.”
Ms Vivian said promoters are misusing self managed superannuation funds they have established or that they establish for their clients, to access superannuation benefits.
She said they are charging fees of up to 20% or more of the fund’s assets for their services.
“They then claim the client can withdraw the money to pay off debts or to fund the purchase of a home, to buy a car, a boat, pay for a holiday or other purposes.
“Involvement in early access to superannuation schemes as either a client or a promoter is illegal and attracts significant legal and financial penalties.”
Ms Vivian said early access to superannuation is only granted in cases of severe financial hardship or on compassionate grounds with approval from the Australian Prudential Regulation Authority.
“In these situations people do not need the services of a promoter and no fee is required.”
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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