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ATO warns about SMSF compliance risks with schemes involving asset protection
The Australian Taxation Office (ATO) has warned self-managed super fund (SMSF) trustees to avoid schemes that offer protection for assets within their fund.
The ATO has issued a warning on its website directed to trustees, stating: “Certain schemes involving asset protection arrangements are on our radar as they present a compliance risk for self-managed super funds.”
The schemes the ATO has concerns about claim to protect SMSF assets from creditors by mortgaging them to an asset protection trust, commonly called a Vestey Trust.
It said that should an SMSF trustee enter into these schemes, they may contravene superannuation laws and that penalties may apply.
The ATO advises that with the super system already protecting SMSFs from creditors, these schemes are putting funds at unnecessary risk. They state that: “If trustees are already involved in one of these schemes and think it contravenes the super laws, they should make a voluntary disclosure. We will take this into account when determining any compliance action.”
How we can help
More and more people are opting for an SMSF, as it can provide much greater flexibility and a way of keeping costs down.
TaxAssist Accountants can assist with:
- Setup and Administration of Self-Managed Super Funds (SMSF)
- Assistance with Lump Sum withdrawals
- Assistance on Property, Shares & Investments inside Superannuation Funds
- Audits on Super Funds
For help with Superannuation, give us a call on 1300 513 332 or fill in our enquiry form and we can set up a free initial consultation.
Date published 10 Feb 2023 | Last updated 10 Feb 2023
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