• Scenario 5


    All persons mentioned in this scenario are fictional.

    End of attention

    Don't leave it to loved ones to clean up your mess

    Jane and Paul live in a small town near the beach and enjoy surfing and being in the outdoors. After 25 years of marriage and raising three children, they were both looking forward to retirement.

    Living a healthy life and keeping fit was important to Jane and Paul, so it came as a complete shock when Paul was diagnosed with cancer.

    Jane was forced to give up her teaching job and care for Paul full-time. Sadly, after a five year battle, Paul passed away.

    After Paul's death, Jane learns her husband sought financial advice from a secrecy haven tax scheme promoter, which involved hiding profits in a secrecy haven under the guise of a loan.

    Jane was devastated her husband would keep an important financial decision like this from her. Jane's lawyer was also disappointed, as it appeared the transactions were illegal. Jane's lawyer arranged a meeting with the ATO to unravel the mess she was left to deal with.

    With the assistance of her lawyer, Jane made a voluntary disclosure to the ATO and was eventually able to calculate the back taxes that had to be paid by the estate.

    Unfortunately, what her husband thought was an easy way of reducing his tax resulted in additional back taxes, penalties and interest, not to mention substantial legal and accountancy costs incurred while unravelling the arrangements.

    In addition to Jane dealing with the grief of losing her husband and the shock of discovering the secret offshore accounts, she is now trying to recover the remainder of the funds from the secrecy haven.

    The only positive to come out of the whole mess was the satisfaction of knowing the scheme promoter was under investigation by the ATO and Australian Crime Commission, and would likely serve time in jail.

      Last modified: 05 Jul 2011QC 23475