ATO Advises Caution With Tax Avoidance Schemes

ATO Advises Caution With Tax Avoidance Schemes

Before you know it, the end of June will be rolling around and we’ll all be thinking about our tax returns. So it’s no surprise that the Australian Taxation Office (ATO) is reminding people to check carefully before diving into last-minute investment schemes designed to reduce tax liability.

Many investment schemes are promoted with the idea that they will reduce tax liability. While there are investment strategies that do that — being able to claim the interest payments on a loan for an investment property is one obvious example — the rules can be complex. If you’re considering that kind of commitment, make sure you get advice on its legality from someone who isn’t trying to sell it to you, as commissioner Michael D’Ascenzo suggests:

Doing your research and seeking independent financial advice from someone not involved with the arrangement before investing is your best protection against promoters of tax avoidance schemes.

As dull as it sounds, an investment whose primary purpose is to reduce your tax bill is not likely to be as effective in the long run as one which can potentially generate a real return. The ATO has a guide to tax-effective investing which covers the basic rules, but specialist advice is going to be a necessity if you do pursue this kind of idea.



  • Uh, yes, we’d just like to advise everyone, if someone tells you there’s some option other than paying exactly as much tax as we tell you, in exactly the way we tell you, um, they’re wrong. Just, continue to follow our exact instructions, and give us what we tell you, and everything will be just fine.

    • Quite immature responses.

      The commissioner is merely suggesting that you are better off checking any investment for potential risks of illegality before plunging head long into them.

      Of course, if you want to be a Muppet and go for tax avoidance schemes, thinking the ATO blind, be my guest.

      Tax minimisation is completely legal and nothing to be ashamed or afraid of. If you’re entitled, claim your deductions and minimise your tax liability.

      The ATO only asks you do so responsibly.

      • Exaemo it was just a joke. I was going to have a go at you, but your response is possibly the most well-typed thing I’ve seen on the internet in a long time.

        The fact that you wrote ‘Muppet’ with an upper case ‘M’ almost made me weep (Muppet being a poper noun, and a trademark of the Henson Company, it shouldn’t be written all lower case).

        I hope it doesn’t sound like I’m being sarcastic. Excellent points and most, wonderfully, excellently written.

        As I said, I was only joking and we all get bitter about tax. I’m sure the folks at the ATO work very hard.

        • I apologise for having misunderstood your statement.

          My passion for taxation law got the better of me.

          Thank you for your compliments. 🙂

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