The Australian Tax Office (ATO) is warning Australians of scheme promoters that allow you to withdraw your superannuation early and illegally via self-managed superannuation funds (SMSFs).
The ATO said they had taken action to shut down promoters who claim they could allow access to superannuation early by setting up SMSFs.
This included a recent case where the ATO took action against a NSW woman in Federal Court for her role in an early super release scheme.
She was not a registered tax agent or financial adviser but had assisted 68 individuals in the establishment of 35 SMSFs.
In many cases, she had charged fees for clients who were not yet legally entitled to access their super, to transfer their funds from an Australian Prudential Regulation Authority (APRA) regulated fund to a SMSF so they could withdraw it.
The ATO took immediate action to shut down the scheme and the court ordered a financial penalty of $220,000 and she received an injunction that banned her from setting up SMSFs for seven years.
Dana Fleming, ATO assistant commissioner, said schemes like the above example cause considerable financial disadvantage to people who can least afford it.
“It’s not just the money they won’t have at retirement. People who access their super illegally may also need to pay tax on the funds they illegally accessed, along with penalties and interest,” Fleming said.
“If you come across a tax or super scheme and you’re not sure it’s okay, get a second opinion. There are simple checks you can undertake yourself, or you can talk to a registered tax professional for sound advice.”
The ATO said that suspected schemes are promoters should be reported to them.