SMSFs cannot be used for Christmas presents!
There are very limited circumstances where taxpayers can legally access their super early, and the ATO is reminding taxpayers that "paying bills and buying Christmas presents doesn't make the list."
Generally, taxayers can only access their super when they:
- reach preservation age and 'retire'; or
- turn 65 (even if they are still working).
To access their super legally before then, taxpayers must satisfy a 'condition of release'. SMSF members who illegally access their benefits may be liable for additional income tax and administrative penalties, and they could be disqualified as a trustee.
For taxpayers who have illegally accessed their super, returning it to the fund may be considered a new contribution. Depending on their contribution caps, this may result in additional tax on excess contributions.
Taxpayers should beware of people promoting 'early access schemes' to withdraw their super early (other than by legal means). They can protect themselves from promoters of such schemes by:
- stopping any involvement with the scheme, organisation or person who approached them;
- not signing any documents, and not providing any of their personal details such as their tax file number; and
- making a 'tip-off' to the ATO online or by phoning the ATO on 13 10 20.
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Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.
