An Australian 51-year-old man has been sentenced to three years jail after orchestrating an illegal early release of super scheme.
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Kent Nguyen was found to have illegally created, operated and benefited from a self-managed super fund (SMSF) named Tot Form Super Fund, and between 2007 and 2009 used the fund to arrange illegal early release of funds for people he knew, the Australian Tax Office (ATO) said.
“Many of the people were in financial trouble and were approached by friends who told them ‘they knew someone’ who could help,” the ATO said.
It is illegal to access your superannuation until you reach your ‘preservation age’, which is between 55 and 60 depending on when you were born.
Australians can access their super before this age only if they’re suffering severe financial hardship, are seriously ill or with a terminal condition, or are suffering a permanent or temporary incapacity.
“In each of the 25 cases, the individual’s super balance that was held within a retail superannuation fund was rolled over to Tot Form Super Fund, with the total amount of funds unlawfully withdrawn exceeding $700,000.”
Nguyen also kept a large portion of this sum, telling ‘clients’ that the money had gone to the ATO as tax.
ATO Assistant Commissioner Ian Read said the sentence shows how the ATO and the law treats those who promote illegal early access to superannuation.
“While the majority of SMSFs do the right thing, this case serves as a reminder that there are severe penalties for those who attempt to cheat the system. Taking your super out from any super fund early without meeting a condition of release, or encouraging others to do so, is illegal,” Read said.
“This case is also an important reminder for people to be aware of their super affairs, and their obligations. There are some very limited circumstances where you may be able to withdraw your super early, but generally you can only withdraw your super when you reach preservation age and stop working.”
According to the ATO, illegal promoters may tell you they can get your super to help you pay off debt, go on holiday or buy a house or car.
Promoters may also use such schemes to steal your identity, as they request your identity documents.
The ATO said that if anyone is contacted by a promoter, to contact the ATO on 13 10 20.
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