Taxpayer Alerts

The Tax Office has issued five Taxpayer Alerts warning taxpayers of arrangements that it is currently reviewing. These alerts relate to:

1. the non-commercial use of negotiable instruments to pay a benefit from a self-managed superannuation fund (SMSF) or make a contribution to the SMSF;
2. the advice provided by a company to its shareholders that monies received in relation to unexercised entitlements for a share offer should be treated as a capital gain and the CGT discount may potentially apply;
3. the re-characterising of capital losses as revenue losses on the disposal of shares by individuals where previously they claimed to be long-term investors eligible for the CGT 50% discount;
4. the selling of interests in managed investments schemes (MIS) by promoters to groups of individual investors on the basis that they will be ‘partners’ in a partnership and will be able to claim upfront deductions for their interests in a MIS; and
5. the attempts by a taxpayer to create or claim a capital loss arising from the artificial receipt and surrender of an interest in a discretionary trust as a default beneficiary.

The Tax Office says these arrangements may give rise to taxation issues, including the application of the general anti-avoidance provisions.

Additionally, the Tax Office says the arrangements described in the first alert in the above list may breach the provisions of the superannuation legislation.