10 Apr 1414
On ATO audit action on dividend arrangements
MEMBER 31 writes:
"So the ATO is not into taking retrospective backflips?
Explain that to my clients who received ATO demands to amend back to 2010 to remove imputation credits claimed where they have taken advantage of the 45 day rule and bought and sold shares to maximise imputation credits.
The clients have utilised the existing law, the asset is real, the risk of the share price dropping is real, but supposedly it’s a sham transaction caught by Part IVA.
Even the Government doesn’t believe Part IVA applies; if they did, why did they bring new legislation to counter this practice if Part IVA so obviously applied?
What’s next? Will the ATO attack bring forward expenses at 30 June because Part IVA applies?
And who suffers? Certainly not the brokers and planners who came up with the plan. Essentially my PI and the SMSF retiree’s nest egg.
Easy targets for the ATO, easy revenue.
Morally questionable but, hey, who cares? If you have an SMSF, you’re a tax cheat, right comrade?
But don’t worry, those pensioners will now qualify for the age pension."
THE TAX INSTITUTE’S TAX COUNSEL, THILINI WICKRAMASURIYA, COMMENTS: The Tax Institute participated in a meeting with the ATO on this issue on 31 March 2014 and our note in relation to that meeting is included in this edition of TAXVINE. We are also preparing a submission to Treasury on the Exposure Draft Tax and Superannuation Laws Amendment (2014 Measures No 2) Bill 2014: Preventing distribution washing and the final submission should be available on our website shortly.