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ATO launches Super Scheme Smart

The Australian Tax Office has launched a new initiative called Super Scheme Smart to help educate individuals about the pitfalls of certain retirement planning schemes and how to protect their retirement nest egg.

Each year the ATO discovers complex tax schemes and arrangements designed by promoters solely for the purpose of helping people avoid tax.

The office is currently seeing a number of schemes targeting Australians planning for their retirement. These schemes encourage individuals to channel money inappropriately through their self-managed superannuation fund (SMSF).

The penalties are substantial for those involved in deliberate tax avoidance schemes; an individual may well lose their right to be a trustee of their own super fund, or, in some cases, they could go to jail.

According to the ATO, individuals most at risk are those approaching retirement.

While the retirement planning schemes can vary, common features people should be aware of include schemes that:

– are artificially contrived with complex structures usually connecting with an existing or newly created SMSF

– involve a significant amount of paper shuffling

– are designed to give the taxpayer minimal or zero tax, or even a tax refund

– aim to give a present day tax benefit by adopting the arrangement

– invariably sound ‘too good to be true’, and as such they generally are

Posted on 29 September '16 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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