Super trustees make big boo-boo
Wednesday, 21 November 2007
Jacqui Walker
The taxman has refunded hundreds of millions of dollars to super trustees who misunderstood the scope of the tax benefits for contributions before 1 July.
The trustees poured in too much money – in one case more than $25 million – hoping to get concessional tax benefits, according to a newspaper report. But the limit on contributions for concessional treatment was $1 million. Withdrawals from super funds are now tax-free for over-60s.
The trustees have since asked for their money back – and it has been refunded: 217 requests for refunds worth $228 million have been met. The average amount returned was $1.2 million.
The tax office reportedly said that some people borrowed $1 million to put into superannuation, only to find out that they could not access the money for the loan repayments.
There has been a boom in self managed super funds, but it seems many of the new funds’ trustees, don’t know what they are doing.