The tax office has revealed it is seeing instances of schemes and spruiking aimed at SMSFs nearing retirement phase to access their funds early, demonstrating the need for and role of professional advice.
At the Chartered Accountants Australia and New Zealand National SMSF Conference 2018, ATO deputy commissioner James O’Halloran was asked for his thoughts on the revelations at the banking royal commission in relation to inappropriate SMSF advice and elder financial abuse within the SMSF sector.
“Separate to the Four Corners commentary last night on the treatment of elders in aged-care homes, it’s fair to say that people heading into retirement are often being approached by people with really inventive schemes, or things we quite clearly would think are inappropriate but they can be sold on the idea,” O’Halloran said at the conference in Melbourne today.
“It might even be through friends – we’ve seen instances of this that have been put on the public record – and even trusted people in their areas and communities are approaching them with what they can do to get early access to their super.
“In short, there is a vulnerability of people being attracted to and mixing up their understanding that their SMSF can be used in a way they like.”
He said despite the significant consequences of such illegal schemes, occurrences were continuing.
“There’s certainly an attraction, I think, as people get on, clearly in many SMSFs there’s a large amount of money of which there are pressures or perhaps immediate needs that people are trying to deal with,” he noted.
“And they see accessing their super, based on non-professional advice in particular, as being a way in which they do it.
“We do see it and some cases are a bit more blatant, but we’ve seen for some time SMSF trustees listening to too much free advice from others, rather than informed advice.”
The ATO deputy commissioner also urged industry professionals to be mindful of these events.
“Many of you in the room are the eyes and ears of what trustees are thinking and hearing,” he said.
“The more we can come out and [report] what we’re seeing before the event, [the better].
“If these scenarios don’t eventuate, that’s good. Nobody’s been disadvantaged or taken for a ride.”
