SMSF Loan Arrangements that Contravene Super Laws. SCAM ALERT


With low interest rates and a struggling economy people are often tempted by early release or get rich quick schemes that are promoted on glossy brochures and may look genuine but can destroy your retirement if they go wrong.

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This is an excerpt from a speech by Matthew Bambrick, the ATO’s Assistant Commissioner for SMSF Segment of Superannuation to the Tax Institute.

SMSF loan arrangements that contravene super laws are also on our radar at the moment. We’re concerned that some organisations are promoting arrangements where SMSF assets provide members with a current-day benefit using vehicles such as pooled investment trusts. Put simply, an organisation invites SMSF members to invest their fund’s assets in a pooled investment trust type of product where the scheme operator draws a commission and if this condition is met, monies from the trust can be accessed as a loan by the fund’s members.

This is a simple form of such an arrangement but there are variations such as offering fund members’ relatives an opportunity to apply for a partial mortgage to cover the value of an asset and then invite their family to use their SMSF benefits to invest in a pooled investment trust. Their relatives can then be granted a second mortgage to further finance their investment.

We encourage anyone who has been approached to invest their SMSF monies into a trust, company or investment product and then offered some or all of that money back as a loan, to seek independent, professional advice before proceeding.

Keep an eye on our website as we’ll be publishing more information about these arrangements in a future edition of SMSF News

So we are back to the basic advice that if it seems to good to be true then it is very likely to be a scam or carry high risk of penalties and drawing the ire of the ATO.

If in doubt contact a SMSF Specialist member of the SMSF Association in your local area or drop me a line with some detail for an initial feedback. We can usually easily spot a scam

I will also be updating readers on any scams or “arrangements” that they should be aware of. If it sounds too good to be true then Google the promoters and search for “complaint” “alert” “scam” associated with that name.

The full transcript of the speech covering a number of relevant issues is available here

Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? then why now contact me at our Castle Hill or Windsor office in Northwest Sydney to arrange a one on one consultation. Just click the Schedule Now button up on the left to find the appointment options.

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

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Verante Financial Planning

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This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

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