About these schemes
The Advantage Trading Fund, Venture Trading Fund, Dragon Asia Fund and International E-Commerce arrangements all involved raising funds for investment in offshore marketing and sales and internet-related businesses. Participants entered into a loan to purportedly buy units in the investment and claim a deduction for prepaid interest or marketing fee.
These schemes generally had the following structuring features:
- round robin financing
- limited or non-recourse loans
- little or no underlying activity
- prepayment of interest (except for International E-Commerce).
Status of this settlement offer: closed
Who did this settlement apply to?
This settlement was available, on request, to participants of any of these four arrangements and who had a disputed liability or entitlement under the Code of Settlement Practice.
Phone us on 1800 177 006 to determine whether this settlement is still available for you.
Details of settlement terms
Principal settlement terms
- Participants who were involved in the arrangement as an investor (who did not receive a fee for another investor's scheme participation and were not involved in the design, preparation, management or implementation of the scheme).
The settlement terms were endorsed by the widely-based settlement panel due to the factors and principles stated below.
We agreed to terms including all of the following:
- no deduction for cash outlays was considered appropriate given that there was a lack of evidence that the participants' funds were used in any business activity
- applying a shortfall penalty at the reduced rate of 25% was considered appropriate in view of the substantial level of tax mischief, while recognising that participants may have been misled by their agents
- remitting GIC to 4.72% for the period from the due date of the original assessment until the earlier of 14 days after the issue of an amended assessment to give effect to settlement, or 31 May 2007. This remission was considered appropriate due to unreasonable ATO delay, and that participants were not receiving ATO communications sent to their advisers/agents.
In return, participants agreed to terms including all of the following:
- deductions for associated claims incurred in participating in the arrangement be disallowed
- giving 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to dispute the liability or entitlement for the arrangement - any objection or appeal currently in process was to be withdrawn
- paying the amended tax debt by the due date or entering into an agreed payment arrangement
- not to claim or seek any deductions, at any time, for losses relating to your participation in the arrangement.
- Participants who received a fee for another investor's scheme participation or who designed prepared, managed or implemented the investment scheme were required to contact us to discuss the settlement options available.
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Phone us on 1800 177 006, to discuss the settlement options available to you.
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Last Modified: Monday, 25 February 2013