ASIC set to eye pension wind-ups for illegal advice
Accountants operating in the SMSF space have been warned that ASIC will closely scrutinise pension wind-ups over the remainder of the financial year in order to identify situations where illegal advice has been given.
Merit Wealth accountants services director David Moss told SMSF Adviser ASIC will analyse the tax returns of the funds in order to establish who is providing advice on pensions and whether they are authorised to provide that advice.
Mr Moss explained that if a client has a transition to retirement pension, for example, and they have it for tax purposes, their accountant is likely to suggest the client wind up the pension following the recent super reforms.
He said ASIC will know that the fund lodged a tax return with a deduction for exempt current pension income last year, with the tax return stating that it was in pension mode.
“When it’s no longer showing that it’s in pension mode in 2017, they will contact the client and ask why it’s no longer in pension mode. They will ask, ‘Did you do that yourself or did you have an adviser that was really helpful?’” Mr Moss said.
If the client tells ASIC it was their accountant, the corporate regulator will examine if that accountant is licensed.
“If ASIC then sees the accountant isn’t licensed, then ASIC has got them,” Mr Moss said.
“It’s not very hard for them to find this stuff out. A lot of accountants are going to potentially get themselves in strife.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.