ATO issues warning about dodgy tax schemes
THEAustralian Taxation Office(ATO) is warning investors to take care over some questionable end-of-year investment schemes.
Concern surrounds three investments, including funds transfers to offshore tax havens, where the funds are drawn down tax free through an entity like a bank or credit card facility.
Superannuation-based schemes giving access to funds before retirement age should also be watched. They often attempt to transform income or profits into lower taxed super payments, which are withdrawn before retirement age.
The third investment to be wary of is pre-paid service warrant schemes, currently promoted by some lawyers and accountants and at seminars around the country.
Tax Commissioner Michael Carmody says investors should also be cautious over satellite or wealth creation seminars that offer to reduce your tax burden or that market investment schemes offering small cash outlays and large tax deductions.
He says people considering end-of-year investments should be wary of any product or scheme promising big tax breaks as a major selling point, and that any investment decision should not be based purely on claimed tax benefits.
Carmody advises those considering so-called tax-effective investments check the investment arrangement has a product ruling, get independent advice before signing up, and if it sounds too good to be true — it probably is.
The ATO has issued an investor checklist to help people avoid end-of-year tax scams. Its web site has information about product rulings, test cases, taxpayer obligations, as well as how the tax system works.
—Lisa Bowman
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