In the 2013 Federal Budget, the Government announced that it will provide $67.9 million over 4 years to the Tax Office to undertake compliance activity in relation to trust structures.
The taskforce will target the exploitation of trusts to conceal income, mischaracterise transactions, artificially reduce trust income amounts and underpay tax. It will focus on taxpayers who have been “involved in egregious tax avoidance and evasion” involving trusts.
Compliance activity will target “known tax scheme designers, promoters, individuals and businesses who participate in such arrangements”.
The measure is estimated to increase revenue by $379 million over the forward estimates period.
The Tax Office has now also released further details on what factors will attract its attention. This article will discuss those factors.Lisa Lynch and Jane Tu, Thomson Reuters
The ATO has released further information on the potential targets of its compliance action utilising its intelligence systems, including new tax return labels.
It said some of the factors that will attract its attention include arrangements where:
According to the ATO, the taskforce is intended to target higher risk taxpayers and not ordinary trust arrangements and tax planning associated with genuine business or family dealings. However, it said those taxpayers that are unsure regarding their arrangements can seek a private binding ruling, or contact the ATO via the trusts taskforce at TrustRisk@ato.gov.au (mark all information "in confidence") to discuss the arrangement. Alternatively, the ATO said voluntary disclosures can be provided if taxpayers need to adjust a tax position that had previously been taken with the Voluntary disclosures - approved form.
Source: These articles were first published in Thomson Reuters' Weekly Tax Bulletin and Tax & Accounting Insight. To subscribe to Weekly Tax Bulletin or Tax & Accounting Insight, or for more information, please:
You can read earlier ClearLaw articles on a wide range of trusts topics here.
Daniel is a Senior Associate in the Maddocks Tax & Revenue team.Daniel advises extensively in the following areas:
His advice covers both direct and indirect tax considerations.
Prior to joining Maddocks, Daniel worked at a Big Four Chartered Accounting Firm focusing on tax consulting for mergers and acquisitions.
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