Tax Commissioner Michael D’Ascenzo today released three taxpayer alerts warning people the Tax Office is closely reviewing three arrangements that attempt to falsely generate claims for inappropriate tax losses.
Mr D’Ascenzo said he has doubts about the legitimacy of these arrangements.
”In the current economic environment we’re expecting to see an increase in tax losses,” Mr D’Ascenzo said.
“However, this means that we will be carefully scrutinising claims to ensure taxpayers only claim losses to which they are entitled.
“These alerts are a timely reminder for people who may be tempted to artificially create losses or to transfer them inappropriately as tax time approaches.
“It also reminds people to take care in claiming genuine losses, for example capital losses can only be claimed against capital gains”.
Investors who are unsure about their situation should seek independent advice or contact the Tax Office for a private ruling on their individual circumstances.
People who approach the Tax Office before they are contacted for an audit will be entitled to a reduction in any penalties that might apply.
Re-characterising capital losses as revenue losses (taxpayer alert 2009/12)
The Tax Office warns it is paying close attention to people who attempt to claim losses as share traders on a revenue account where previously they claimed to be long-term investors eligible for the capital gains tax 50% discount.
Managed Investment Schemes: purported partnership participation (taxpayer alert 2009/13)
The Tax Office has seen attempts by promoters to sell interests in managed investment schemes (MIS) to groups of individual investors on the basis that they will be ‘partners’ in a partnership and will be able to claim upfront deductions for their interests in the MIS.
This taxpayer alert reminds taxpayers they can only rely on a product ruling if it is implemented in accordance with the arrangement in that product ruling and warns that partnerships of the type in this alert are not covered by Tax Office product rulings or other tax clearances.
“Please take care,” Mr D’Ascenzo said.
CGT consequences of assignment of default beneficiary’s capital interest (taxpayer alert 2009/14)
Under this arrangement a taxpayer attempts to create or claim a capital loss arising from the artificial receipt and surrender of an interest in a discretionary trust as a default beneficiary.
More information
Taxpayer alerts 2009/12, 2009/13 and 2009/14 are available from the Tax Office website www.ato.gov.au/atp.
Tax agents with information about people or companies who may be promoting arrangements covered by these alerts should call the tax practitioner integrity service on 1800 639 745.
Taxpayers who have information about these arrangements should call the Tax Office on 1800 177 006. People can also use this number if they want more information about the taxpayer alerts.
TAXPAYER ALERT
Taxpayer alerts are intended as an ‘early warning’ to taxpayers and their advisers of significant tax planning issues or arrangements that the Tax Office has under risk assessment or about which it has concerns.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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