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.
“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.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 23 Aug 2017'No apparent benefit' in ATO position on ECPIBy Katarina Taurian
- 23 Aug 2017Transfer balance cap confusion posing risks for practitionersBy Miranda Brownlee
- 23 Aug 2017TBAR reporting tipped to expose illegal adviceBy Miranda Brownlee
- 22 Aug 2017Contentious views on segregation locked inBy Katarina Taurian
- 22 Aug 2017Contributions spike for 2016-17 financial yearBy Staff Reporter
- 22 Aug 2017ATO targeting illegal retirement schemesBy Staff Reporter
- view all
- Transfer balance cap confusion posing risks for practitioners
Confusion around certain aspects of the transfer balance cap could be leading some practitioners to provide advice to clients based on premi...read more
- view all