ATO cracks down on discretionary trusts
Accountants who manage discretionary trusts for clients may be investigated by the Australian Taxation Office (ATO) as it looks into the legality of the schemes and their potential to foster tax avoidance.
The ATO says it is looking into specific cases of misuse and considering whether the partnerships are "effective at law".
The investigation follows reports of the structures being used to help trustees avoid their tax obligations, ATO second commissioner Bruce Quigley said.
While further advice is still being sought, the ATO said it is in the process of drafting compliance documents to crack down on discretionary trust tax avoidance.
It advised taxpayers to seek independent advice if they have a discretionary trust and said voluntary disclosures could attract a reduction in penalty.
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