The tax office keeps a close eye on artificial tax schemes.

It has highlighted a trio of arrangements aimed at those who are nearing retirement and have a self-managed super fund.

They should avoid the following:

• Artificial arrangements involving SMSFs and property development ventures, involving the creation of complex structures, often including a chain of interposed unit trusts, which result in the income from the property development being distributed to an SMSF, rather than to the individual, and hence subject to a lower rate of tax.

• Arrangements where SMSF members deliberately contribute an amount beyond their non-concessional contributions cap in order to manipulate the taxable and non-taxable components of their balance when they withdraw the excess.

• Arrangements where an individual or related entity grants a legal life interest over a commercial property to an SMSF, as opposed to the SMSF obtaining full legal ownership.

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