Australian Tax Office Warns of SMFS Scam

January 14, 2009 International Taxation  No comments

The Australian Tax Office (ATO) has issued a warning about self managed superannuation funds (SMSFs).

The SMFS schemes have claimed to allow early access to superannuation funds, deemed illegal. According to the ATO the schemes have been targeted at those perceived to be of lower English speaking capacity or in difficult communication situations. This allows the organisers to mislead the victim as to the legality and implications of early super-annuation access.

Tax Commissioner Michael D’Ascenzo voiced his concern to the plight of the victims, as both them and the organisers could be regarded as guilty and faces legal and taxation ramifications.

Self managed superannuation funds are in essence a trust fund which has elected to be a regulated fund with an investment strategy, acting as a superannuation scheme provider. While this is perfectly legal and in some cases beneficial, it allows access to all superannuation funds to the trustee. In this case invested money has been used on either personal spending or fraudulent investments.