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  • Too good to be true?

    22 November 2019

    Heard about a tax arrangement that sounds too good to be true?

    Tax planning is acceptable, as long as it’s within the intent of the law. But sometimes dodgy promoters recommend arrangements that involve the deliberate avoidance of tax.

    Be on the lookout for promoters who:

    • tell you their product is ‘zero risk’
    • discourage you from seeking independent advice
    • ask you to maintain secrecy to protect the arrangement from rival firms.

    The way an arrangement is financed and structured can also raise red flags, such as:

    • investments primarily funded through tax deductions, such as substantial interest pre-payments in a financial year
    • deferring income to later tax periods
    • changing private expenses into business expenses
    • moving taxable income to an entity that is tax exempt or has a lower tax rate, like a charity, company or super fund.

    It pays to be careful. If you’re caught up in a tax exploitation scheme, it could result in additional tax and financial penalties.

    If you see a tax scheme that seems suspect, or you think you might be involved in a scheme, make a tip-off to us.

    Remember, registered tax agents can help you with your tax.

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