The perpetrators are surfacing in suburban areas of major Australian cities, including a concentration in Western Sydney on the east coast.
The main targets so far have been taxpayers with small to medium super balances. However, the ATO suggested SMSF set-up could be encouraged by promoters to get access to super balances and taxpayer information.
The promoters are promising early access to superannuation for a fee, supplying documentation to carry out the transaction, and requesting identity records from taxpayers.
In most cases, early access to superannuation is illegal and costly for taxpayers. For example, for SMSF trustees who access their superannuation early, there are tax consequences, as the superannuation becomes part of assessable income regardless of whether it is later returned.
Further, if trustees knowingly allow illegal early access to super, penalties of up to $420,000 are applicable, as well as fines of up to $1.1 million for corporate trustees.
In addition, trustees can be disqualified, and issued with an administrative tax shortfall penalty for intentional disregard of the law of approximately $15,000.
Civil and criminal penalties are applicable to promoters of illegal early release schemes. Fines and imprisonment can be imposed in these cases.
The ATO told SMSF Adviser that tax professionals are not involved in the promotion of this particular scam.
katarina.taurian@momentummedia.com.au
