The Australian Taxation Office (ATO) has signalled that it will be updating information around tax planning arrangements aimed at self-managed superannuation funds (SMSF) which it deems to be “high risk”.
Included in those arrangements are SMSF investment in property development involving related party and manipulation of the concessional and non-concessional caps.
ATO deputy commissioner, James O’Halloran has told a Melbourne accounting forum that the Government’s recent Budget changes to superannuation such as reduced concessional caps appeared to have generated increased activity around schemes.
He said it was the ATO’s role as a regulator of SMSFs to warn people about the danger of arrangements that exposed SMSFs and their members to regulatory risk and that in the next few weeks the ATO would be publishing an update highlighting existing and emerging arrangements it considered “high risk” from a regulatory and tax perspective.
“Whilst a number of the arrangements highlighted are not necessarily specific to the super changes, the nature of some may mean they appear more attractive to uninformed SMSF trustees in light of the changes,” O’Halloran said.
He said the updated information about high risk schemes would be in addition to the arrangements that the ATO had previously warned about in earlier Super Scheme Smart campaigns (such as dividend stripping, arrangements intended to divert personal services income to an SMSF, and non-commercial LRBAs).
“The updates will highlight the risks associated with contrived arrangements involving SMSF investment in property development ventures involving related parties; the granting of a legal life interest over a commercial property to an SMSF; and arrangements where an individual deliberately exceeds their non-concessional contributions cap to manipulate taxable and non-taxable components of their super interest upon refund of the excess,” O’Halloran said.
