As part of its broader focus on illegal tax schemes, the ATO has today launched an initiative aimed at identifying the promoters of tax avoidance schemes and protecting consumers.
ATO deputy commissioner Michael Cranston said while the ATO has had considerable success in shutting down tax avoidance schemes, it has recently seen an increase in schemes targeting those approaching retirement.
Some of the main groups being targeted, according to the ATO, are small business owners, company directors and property investors.
Mr Cranston said the promoters of these schemes also recognise the role that tax professionals play, and are therefore also targeting accountants with the aim of getting them to recommend these schemes to clients.
Most of the schemes, Mr Cranston said, are artificially contrived and complex, involving considerable paper shuffling. They are designed to leave the taxpayer with minimal or zero tax, or even a tax refund.
“Promoters of retirement planning schemes may incur significant punishment, including prosecution, and where intermediaries are found to have been encouraging clients to adopt these arrangements the ATO will consider the application of the promoter penalty laws. The ATO may also consider referring the matter to the Tax Practitioners Board,” he said.
“Individuals caught using an illegal scheme identified by the ATO may incur severe penalties under tax laws.”
“We do our best to shut down dodgy schemes but the best defence is working together. Blowing the whistle on those promoting retirement planning schemes will help us stop them from risking your or others’ retirement savings,” said Mr Cranston.
He stressed the importance of working with the ATO and reporting those who promote these schemes.
“We want to work with you to help protect your clients’ retirement nest eggs from unwanted predators.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.