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  • Background check for smart investments

    Where opportunities may not be clear-cut it may be prudent to investigate tax-effective arrangements.

    Before you commit to an arrangement

    You're entitled to minimise the amount of tax you pay through legal tax planning arrangements. However, under Australia's self-assessment system the way your tax affairs are structured is your own responsibility. This is regardless of whether you use a tax agent to prepare your tax return. The claims you make are also your own responsibility, so when making decisions that will impact your tax liabilities, it's important to get independent and impartial advice.

    When we identify arrangements where the promised tax benefit isn't available under the law, the arrangement is deemed to be a tax avoidance scheme. As a result, tax deductions for the arrangement are disallowed and participants face potential penalties.

    Tax schemes aren't limited to the 'too good to be true' type of arrangement. They can be more sophisticated than many people realise. Schemes can be complex arrangements that are offered to you by some advisers with claims the availability of tax benefits is confirmed by genuine experts.

    It is important that you make sure you understand the arrangement and the promised tax benefits are legal.

    • Check taxpayer alerts – see whether we have concerns about the arrangement.
    • Check product rulings – if we have already issued a product ruling for the arrangement it provides you with certainty as long as the arrangement is implemented exactly as it has been outlined in the ruling.

    You can also apply to us for a private ruling to cover your own circumstances if you are not sure about the tax consequences of an arrangement you are considering.

    Make sure the promoter of the arrangement gives you a product disclosure statement (PDS) and check that they hold a valid Australian Financial Services (AFS) licence, issued by the Australian Securities & Investments Commission (ASIC).

    You should always seek independent advice from someone who is not selling you the arrangement.

    Last modified: 13 Sep 2016QC 45967