Powered by MOMENTUM MEDIA
subscribe to our newsletter

ATO issues SMSF tax avoidance warning

Reporter
14 November 2013 — 1 minute read

The ATO has today issued a warning to trustees to beware of tax avoidance schemes targeting SMSFs.

SMSFs can be targeted by promoters of tax avoidance schemes, the ATO stated. There are several identifiable schemes trustees should be aware of, including arrangements involving the disposal of shares in a related private company with “substantial retained profits” and franking credits to an SMSF.

In addition, the ATO said trustees should be wary of arrangements involving holiday travel claimed as investment expenses by SMSFs.

Advertisement
Advertisement

“We take firm action against those who knowingly contravene the law, including imposing sanctions under the promoter penalty laws,” the ATO stated.

The ATO has also warned that there are significant consequences for trustees who become a disqualified person.

“If you are a trustee and become a disqualified person, you are not allowed to remain a trustee and must remove yourself immediately. This rule also applies to directors of a corporate trustee of an SMSF,” the ATO stated.

The regulator has also said trustees should seek “good quality advice” from a licensed practitioner who can warn of the financial “pros and cons” involved with establishing and maintaining a self-managed fund.

ATO issues SMSF tax avoidance warning
smsf logo
smsfadviser logo

Become a pro at SMSF fundamentals and make your clients bulletproof with the SMSF Foundations course. Earn up to 21 CPD hours, and learn directly from Aaron Dunn from Smarter SMSF as he deep-dives into the fundamentals you need to know to successfully undertake your work as an SMSF practitioner. Learn more

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.