SMSFs in ATO's early release spotlight

Illegal early release superannuation scams remain a problem, with the Australian Taxation Office (ATO) revealing it has finalised 317 audits of such schemes in the past financial year, raising an additional $839,000 in income tax assessments.

The focus of the ATO’s activities had been on rollovers into self-managed superannuation funds (SMSFs).

The data on the illegal early release schemes was revealed by Assistant Tax Commissioner Stuart Forsyth, who promised that all identified scheme promoters would be investigated and, when appropriate, charged with criminal offences.

Further revealing the prevalence of illegal activity with respect to SMSFs, Forsyth said the ATO had detected and either removed or prevented 708 SMSFs from appearing on its Super Fund Lookup website during the past financial year.

“Since February 2010 we have moved to stop SMSFs linked to schemes from ever operating and we will continue to expand our work in this area in line with our belief that prevention is better than cure,” he said.

Forsyth said the ATO had recently returned assets totalling $510,000 to the protection of funds regulated by the Australian Prudential Regulation Authority (APRA) and was looking at resolving $1.3 million in assets still subject to ATO freeze notices.

“We are working on further ways to secure rollovers so that only verified SMSFs and their members can receive payments,” he said. “We should be in a position to consult with the superannuation industry in the next two months on how to quickly achieve this goal.”