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 top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
