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New measure to combat franked distributions funded by capital raisings

The Government has announced a new measure in the 2016-17 Mid-Year Economic and Fiscal Outlook to prevent the distribution of franking credits where a distribution to shareholders is funded by particular capital raising activities.

This new measure is intended to address issues raised by the Tax Office’s Taxpayer Alert 2015/2 regarding arrangements used by companies for the purpose of, or for purposes which include, releasing franking credits or streaming dividends to shareholders.

The ATO have been reviewing arrangements with all or most of the following features:

The new measure is set to apply to distributions made after 12.00pm (AEDT) on 19 December 2016. The measure has not been enacted and is subject to the normal parliamentary process.

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SMSFs: beware of illegal early super release

July 13, 2018

The Australian Tax Office (ATO) is reminding self-managed super fund (SMSF) trustees to beware of allowing members to access their super early.

A self-managed super fund (SMSF) trustee must meet a condition of release before any funds can legally be released.

The ATO can issue severe penalties if you or a SMSF member access your super before you are legally entitled to do so.

Some consequences of getting caught up in an illegal super scheme include the disqualification of trustees, imposition of administrative penalties, the fund being made non-complying and prosecution.

The Tax Office encourages those members who have been involved in an illegal super scheme to contact them immediately. The ATO will review your voluntary disclosure and take your circumstances into account when determining any penalties.