There are a number of schemes currently targeting Australians planning for retirement. Some current examples, the ATO is concerned about, include:
Dividend stripping – Where the shareholders in a private company transfer ownership of their shares to an SMSF so that the company can pay dividends to the SMSF. The purpose being to strip profits from the company in a tax-free form.
Non-arm's length limited recourse borrowing arrangements - When an SMSF trustee undertakes limited recourse borrowing arrangements (LRBA) established or maintained on terms that are not consistent with an arm's length dealing.
Personal services income - Where an individual (usually at pension phase) diverts income earned from personal services to a self-managed superannuation fund (SMSF) where it is concessionally taxed or treated as exempt from tax.
“The ATO wants to play its part in ensuring soon-to-be retiring taxpayers protect their nest eggs. That means working closely with the individuals but also with their trusted advisers. In order to put a stop to these schemes, we are encouraging people to come forward if they believe they are at risk, are already involved in a scheme or believe their clients are.”
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