About the scheme
The aim of this scheme is to create deductions for individuals who are not entitled to claim them. It involves a promoter and associates executing documentation to invest in a managed investment scheme (MIS). Subsequently the promoters allegedly created partnerships and claimed the deductions associated with the MIS. The promoters then distribute the partnership losses to participants who have not signed any of the relevant documentation, and therefore have no interest in the MIS nor are they partners in a partnership. Taxpayer Alert TA 2009/13 Managed Investment Schemes: Purported partnership participation describes other features which may apply to this arrangement.
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Settlement conditions and disclaimers
The following settlement information is a general guide. You need to read conditions and disclaimers for more detailed information.
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Status of this settlement offer: current
Does this settlement apply to you?
You can request this settlement if you have entered into a managed investment schemes: Purported partnership arrangement, and you have a current disputed liability or entitlement under the Code of Settlement Practice or, you are able to enter into such a dispute.
These settlement terms apply to participants who were involved in the arrangement and who:
- did not receive a fee for another person's participation in the scheme, and
- were not involved in the design, preparation, management or implementation of an investment scheme.
Participants who received a fee for getting someone else involved in the scheme, or who designed, prepared, managed or implemented the scheme are required to contact us.
You can phone 1800 177 006 to discuss the settlement options available to you.
Principal settlement terms
The settlement terms were endorsed by the widely-based settlement panel based on the factors and principles below.
We agreed:
- that no deduction was allowed for partnership losses claimed
- a further reduction of 5% to the shortfall penalty amount imposed depending on the individual circumstances was appropriate due to the circumstances of the participants and such remission would be an incentive to settle
- no further remission of interest, other than any remission available in accordance with ATO Practice Statement Law Administration PS LA 2006/8.
In return, participants agreed to:
- give up the right to continue (or begin) to dispute the liability or entitlement for the arrangement. Any objection or appeal currently in process was to be withdrawn, and
- pay the amended tax debt by the due date or entering into other agreed payment arrangements.
Last Modified: Thursday, 8 September 2011