Certain schemes involving asset protection arrangements are on ATO radar as they present a compliance risk for SMSFs. The schemes concerned with claim to protect SMSF assets from creditors by mortgaging them to an asset protection trust, commonly called a ‘Vestey Trust’.
The arrangement also involves:
If trustees of SMSFs enter into these schemes they may contravene one or more super laws, and penalties may apply. If trustees are already involved in one of these schemes and think it contravenes the super laws, they should make a voluntary disclosure. The ATO will take this into account when determining any compliance action.