The ATO has made a call to professional accountants to help identify and manage illegal early access to superannuation by members of SMSFs.
Generally, access to super can only be possible when:
- You retire and turn 60, or
- You turn 65, regardless of whether you’re working
Early access to superannuation is only possible in limited circumstances such as terminal illness, permanent incapacity, severe financial hardship, following strict protocols before any amount is paid out.
SMSFs provide members with control, but there is an underlying temptation to approve transfers without proper controls. Common ways illegal early access occurs is when:
- Trustees (or their businesses) are in financial distress and they use the superannuation account for a short-term loan
- A promoter offers access through a scheme – often to get people to establish the SMSF and roll over their super into the SMSF
Illegal access to SMSF account or assets is easy to identify and will generally be identified by your auditor. Not only is it likely that your retirement savings have been lost or impaired, but you are likely to face additional tax, penalties and interest. You may be disqualified as a trustee and your name will be published online.
An early signal that there is a problem is when SMSF annual returns are not lodged on time or at all, so ensure you are up to date with your SMSF compliance.
If you have any queries about your SMSF, feel free to reach out to our Solomons Accounting Team.
