PRE-RETIREES: avoid ‘too good to be true’ schemes

The ATO has launched a new project called ‘Super Scheme Smart’, an initiative aimed at educating individuals about the potential pitfalls of ‘retirement planning schemes’.

The ATO says individuals most at risk are those approaching retirement, including anyone aged 50 or over, looking to put significant amounts of money into retirement, particularly Self Managed Super Fund trustees, self-funded retirees, small business owners, company directors, and individuals involved in property investment.

While retirement planning schemes can vary, there are some common features people should be aware of. Usually these schemes:

• Are artificially contrived and complex, usually connected with a SMSF
• Involve a lot of paper shuffling
• Are designed to leave the taxpayer with minimal or zero tax, or even a tax refund
• Aim to give a present day tax benefit by adopting the arrangement

Individuals caught using an illegal scheme identified by the ATO may incur severe penalties under tax laws, which includes risking the loss of their retirement nest egg and also their rights as a trustee to manage and operate a SMSF.

“Retirement planning makes good sense provided it is carried out within the tax and superannuation laws.  Make sure you are receiving ethical professional advice when undertaking retirement planning, and if in doubt, seek a second opinion from an independent, trusted and reputable expert,” says the ATO.

• If you would like more information please contact Kothes Accounting Group Bega, where you can speak to one of our directors Gary Skelton, who is the only Self Managed Super Fund specialist on the NSW Sapphire Coast.
• This article appears in KOTHES Advantage, September edition. If you would like to subscribe to our monthly newsletter please send an email to admin@kothes.com.au