Financial Tools
  Client Portfolio Access
  New Client Kit
  Enquiry / Seminar Registration
Hot Issues
An investor's personal trainer
SMSF trustee penalties going up
Contraventions rife among non-advised SMSF trustees
Dealing with investor uncertainty
Reserve bank gives the economy a lift
Retirement planning: the gap between intention and reality
Market Update – April 2015
Budget 2015 - some professional opinions
Australian Government - Budget 2015
What does the ATO want from you?
Making sense of the new excess contribution rules
Greying, working and contributing
Simple-yet-smart investment housekeeping
Market Update – March 2015
Customer-centred innovation underpins high satisfaction among financial advice customers
Two sides to the age profile of SMSF members
Actuaries call for end to superannuation policy tinkering
ATO urges caution on pensions
Market Update - February 2015
Aussie economy shifts gears as structural changes take hold
The catch 22 of retirement savings
Are there reasons to help the tax man do his job?
Some financial terms explained
Small business paradox
Good financial planning finally has a value: 23% more income in retirement
Articles archive
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 3 July - September 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 3 July - September 2006
Quarter 2 April - June 2006
Dressed up tax schemes


This is the time of year when the minds of many investors focus more on end-of-financial-year tax planning. And not surprisingly, this is the time of year when spruikers of questionable tax arrangements more heavily promote their wares.  ........

The tax office published a fascinating article this week about how tax-avoidance schemes or
arrangements have changed since the 1970s. (Tax Avoidance: That Was Then; This Is Now).

In the 1970s and early 1980s, the tax office says thousands of people entered mass-marketed
tax schemes, "attracted by promises of guaranteed returns in the form of
inflated tax deductions". Promoters of "blatant" tax-avoidance schemes would
make "outlandish" claims about their ability to avoid tax.

Although the tax laws were tightened in 1981 to strike at tax-avoidance
schemes, more tailored, boutique tax schemes emerged, offering so-called
investments in the likes of films, franchises, research and development, and
primary production.  Again, the tax laws were tightened, this time
targeting scheme promoters.

How have today's tax schemes changed?

"...the schemes of the 21st century are no longer as blatant," comments the ATO. "The trend is
moving towards more complex arrangements, "dressed up" as specialist financial
or structured investment arrangements."

But as the tax office emphasises, the dressing up of schemes as structured investment products
can make it a challenge for taxpayers to tell the difference between legitimate
tax-minimisation arrangements and tax-avoidance schemes.

Perhaps the bottom-line for investors is not to overlook some of the most basic principles
of sound investment:

  • Properly investigate any product or service before handing over your money.
  • Consider gaining independent, quality professional advice.
  • Assess whether an "opportunity" stands up as a sound investment in its own right - aside from its claimed tax treatment.

As the tax office concludes: "Even if you are an investor with years of experience, any
arrangement that offers substantial tax benefits should be fully investigated
before you get involved."


By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia

28th March 2012


  Financial Advisor | Financial Planner | Financial Adviser | Financial Planning | Financial Planner Sydney