ATO settlement offer slammed
Taxpayers Australiahas labelled a settlement offer by theAustralian Tax Office(ATO) for involvement in mass-marketed agricultural schemes “rough justice” following a court decision last week ruling in favour of taxpayers.
Last year the ATO made a settlement offer to around 60,000 taxpayers who had invested in ‘tax-effective’ agricultural projects.
Under the settlement the taxpayers were required to pay back the deductions they received as a result of the tax schemes, but would still be able to claim their cash outlay as deductions and avoid paying any penalties or interest on the tax debts they owed to the ATO.
While it was a condition of the offer that they could not then benefit from any favourable court outcome, around 87 per cent accepted the offer, which expired on June 21 2002.
However in a decision handed down early last week, the Federal Court found in favour of a taxpayer in the case of Sleight v Commissioner of Taxation.
The Federal Court ruled that the taxpayer did not enter the project for the dominant purpose of acquiring a tax benefit.
Taxpayers Australia says, “This is a win for taxpayers who held out, but a loss for those who accepted the ATO’s settlement offer in good faith”.
“This decision by the court sends a clear message that the ATO’s blanket approach to denying deductions to investors in all tax effective investment projects, irrespective of the facts and circumstances of each case, is rough justice.”
Recommended for you
The corporate regulator has cancelled the AFSL of a Perth advice firm, with the firm having previously seen its licence temporarily suspended in 2020.
Having proposed changes earlier this year, ASIC has clarified how it will support licensees with additional relief under the reportable situations regime.
AMP has partnered with BlackRock and research house Lonsec to provide a model portfolio capability on its North platform that offers “portfolio customisation at scale” to advice practices of all sizes.
Money Management rounds up actions ASIC took against advice individuals in the first half for FY25 from exam falsifications to dishonest conduct.
