Tax office cracks down on super schemes

The AustralianTaxation Office (ATO) has threatened to prosecute the Australian-based agent of an offshore group, after it discovered the group arranging to give Australian investors access to their superannuation savings in a way considered to be illegal.

The group, operating under the name of SMC and describing itself as an expert in the tax havens of the Dominican Republic and Grenada, was caught by the ATO promoting a scheme offering individuals immediate access to their superannuation to pay for a holiday, renovate a home, buy a car or finance a business.

The scheme required individuals to roll their superannuation savings into a self-managed super fund. It is understood the money was then invested offshore and then loaned immediately back to individuals by SMC, who are required to pay the money back in full when they reach retirement.

It appears most people were lured into the scheme through weekend advertisements placed by SMC in Queensland newspapers.

It is understood the ATO has forced SMC’s Australian-based agents into publishing a retraction of its advertisements in the first of a series of steps to avoid prosecution.

The ATO has also issued a taxpayer alert urging investors to steer clear of schemes offering early release of superannuation benefits.

Tax commissioner Michael Carmody says individuals face penalties of up to five years imprisonment or fines of up to $220,000 for getting involved in such schemes.