The tax office has found increasing incidences of SMSF members deliberately over-contributing in an attempt to reduce their tax bill, and has warned that members could be potentially triggering the anti-avoidance rules.
ATO assistant commissioner Kasey Macfarlane says the ATO is concerned by an increasing number of cases of super members deliberately exceeding their non-concessional caps.
It appears that members are using the refunds of excess non-concessional contributions to reduce the taxable components of their benefits.
“There appears to be no reason why a super member would do so other than to generate the potential downstream tax benefit that arises when their super benefit is eventually paid,” Ms Macfarlane told delegates at the SMSF Adviser Technical Strategy Day in Sydney.
Ms Macfarlane warned of the possible application of Pt IVA of the Income Tax Assessment Act 1936 and the general anti-avoidance rules in those particular arrangements.
“This is something the ATO is concerned about, in particular there seems to be no reason a member would undertake that strategy other than to generate those potential downstream tax benefits when their super benefits are eventually paid,” she said.
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