ATO cracks down on trust over tax avoidance schemes
The Australian Taxation Office has launched a campaign against tax avoidance schemes run by trust funds and debt-laden companies. The campaign encourages people whose trusts use these schemes to come forward voluntarily to avoid heavy penalties and possibly prosecution. The targeted arrangements involve trusts handling cash from a capital gain. In most cases, the arrangement has one beneficiary receiving the generated funds tax free, while another beneficiary, a company, receives the tax liability.
However, the company is unable to pay the bill because it never received the funds from the capital gain. When the company is unable to pay the bill it is wound up, making it much harder for the ATO to recover any of the tax debt.
The ATO has warned the public that it now has systems in place and can detect these types of practices. Warnings have been issued to all people involved in such schemes as it cracks down on this emerging form of tax avoidance.
If you believe you may fall under the above category it is imperative you seek professional advice as soon as possible. The Quinn Group’s tax lawyers and tax accountants can provide you with advice and guidance and liaise with the ATO. You can submit an enquiry online at www.quinns.com.au or call 02 9223 9166.