Beware: Penalties and pitfalls of the early release of super.

The Australian Taxation Office (ATO) has issued a renewed warning to Australians about the potential ramifications of illegal early release of super.

 

 

Specific medical conditions or severe financial hardship are two of the very limited circumstances where early release is legal.

In the new warning, the ATO has urged individuals to “beware of people promoting early release of super schemes”.

“They might tell you they can help you withdraw your super to pay off credit card debt, buy a house or car, or go on a holiday,” it said.

The warning comes not long after a man was sentenced to three years in jail after orchestrating the illegal early release of superannuation for 25 people in the community. 

An SMSF adviser was also banned from providing financial services last year after he was found to have been enabling people to use their superannuation savings to buy property. 

Illegal schemes will cost you a lot more than the super you withdraw, the ATO has flagged, with severe fees and penalties for those people that do the wrong thing.

Not only this, promoters of such schemes that encourage the early release of super will also face prosecution, with the ATO asking anyone who has been approached to participate in such a scheme to contact the office directly.

 

 

Grace Ormsby
03 February 2020
smsfadviser.com

 

  • COVID-19 resources -Update July 2020

    Several new links have been added to the many already in this article, links that date back to the beginning of the COVID-19 pandemic. If you have any questions, or require further assistance, please send us an email or phone.

  • 'But how will we pay for this?'

    It's a natural question about global policymakers' multitrillion-dollar efforts to prop up economies and markets against the monumental threat of the COVID-19 pandemic. And the question has understandably taken a back seat to confronting immediate health and welfare challenges.

  • SMSFs urged to review leases before granting rent relief

    SMSF clients planning to provide rent reductions to tenants should review the lease agreement to ensure the provision of rent relief won’t result in a breach of the lease, says an industry lawyer.

  • New financial year to bring new rules for super

    As the 2019–20 financial year draws to a close, a technical expert has highlighted some of the new rules commencing for super funds for the 2020–21 financial year.

IT Financial Services, ABN 48 097 884 976, is an Authorised Representative of Apogee Financial Planning. Apogee Financial Planning Limited ABN 28 056 426 932 is an Australian Financial Services Licensee and has its registered office at 105 - 153 Miller Street North Sydney NSW 2060. A member of the National group of companies.