Commissioner of the Australian Taxation Office (ATO), Michael D’Ascenzo, says tightening up the “upfront procedures in validating the existence of funds” is the solution to eliminating illegal early release schemes that use self-managed superannuation funds (SMSFs) as the vehicle to access funds.
D’Ascenzo told delegates at the 2011 Self-Managed Super Fund Professionals’ Association (SPAA) conference that the number of illegal early release schemes has left him “worrisome”.
He said schemes used for purposes other than retirement and special circumstances are becoming “more prevalent” and that the ATO is currently working with ASIC to prosecute a number of promoters.
D’Ascenzo said that “the process of trying to identify arrangements early to see whether or not these are legitimate arrangements and to identify those involved is critical” in the SMSF environment.
“What we’re trying to do is address issues early,” he said.
The registration process will tightened with a major upgrading of systems to address the complexity of SMSFs.
“Our current approach is to do some upfront compliance on funds,” he said.
“The big picture is that self-managed super funds are part of the broader scope of tax and superannuation and I think we’ve come a long way since I first spoke at the SPAA conference, some five, six years ago.
“Ensuring that there are adequate post-working incomes for Australians now and into the future places superannuation right at the forefront of issues… and one of the policy goals is to create a longer-term generational shift to higher levels of compliance.
“The Cooper changes probably aren’t as large in terms of the impact on the ATO, [but] it is strengthening what is currently there.
“What we don’t want to do is wait till legislation and then think about how we would react.”
The SPAA Conference started today at the Brisbane Exhibition & Convention Centre and concludes on Friday.
