GiffardSim principal and superannuation specialist David Sim warns of popular schemes concerning early access to super funds surfacing in the Shoalhaven. Here he offers tips for any individual to consider when faced with a deal that sounds like it could be too good to be true.

Dodgy tax schemes and deals often surface around tax time, and South Coast chartered account, David Sim of GiffardSim Accountants warned of schemes concerning early superannuation payment surfacing in the local area. “A popular scheme at the moment is to establish a self managed superannuation fund, into which your super is paid. The new super fund then invests in an offshore unit trust, which channels the money back to you, minus the promoter’s cut of course,” Mr Sim said.

The scheme promoters make their money by charging fees or commissions that may be as high as 30 per cent. “These promoters are effectively helping themselves to a cut of your retirement savings,” he said. The long term consequences of falling for a crooked scheme can be very costly and it may be quite difficult to avoid serious legal ramifications or ongoing financial effects. “Not only does this wipe out your retirement savings, but you are opening yourself to significant penalties in the process,” he said. Penalties could include a hefty tax bill, fines and a possible jail sentence of up to five years if you act as a trustee of a fund using one of these schemes. 

If you are still under 55 years of age, there are only quite limited circumstances in which you can access your super savings. “If someone is offering to get money out of super for you, you need to get the deal checked out by talking a reputable advisor before doing anything else,” Mr Sim said. “The general rule is that if you think it is too good to be true, it generally is and a healthy dose of skepticism is required.”

The Australian Tax Office warned the schemes are often promoted through word of mouth and certain groups in the community are targeted. In particular, the ATO are investigating a number of schemes which have affected those working in the aged care industry and also Pacific Islander and Filipino communities. “Promoters often target people who they think are in financial difficulty because they think they are easy prey,” added Mr Sim.

The ATO cited several common sales pitches that you should never accept without thoroughly checking first such as; ‘There are no risks, we guarantee the returns’; ‘You don’t need credit or asset checks, we’ll send you the money’; ‘Even if the investment doesn’t go ahead, you’ll still make a profit from your tax refund’; ‘Sign this secrecy agreement – we don’t want our competitors stealing our ideas’ and more.

If you need any advice on superannuation, please speak to one of our experienced specialist accountants at our South Coast firm in Nowra, GiffardSim Accountants, on 4421 4355.