Tax, welfare benefits and investing
Warning about hiding money from the Tax Office and Centrelink
Some people make the disastrous mistake of trying to evade tax or hide assets or income which may affect their social security entitlements. Some people ask their advisers to help them do this. No reputable adviser will assist you in this kind of illegal activity.
The risks are:
1 You may end up in jail or paying a fine
If you are caught, you may end up going to jail or paying a fine, as well as penalty tax or losing any advantage you gained.
2 You are setting yourself up to be swindled
Just remember that if someone is crooked enough to help you evade tax, then they are definitely crooked enough to rip you off as well.
Most schemes aimed at evading tax involve deliberately hiding assets or income, and giving someone else a large degree of power over your money. This means there may be no paper trail to link you to the assets or income if you want to claim them as your own. It is all too easy for a crook to siphon off your money and leave you none the wiser or with no evidence to show you have been swindled.
If you mess around with illegal activities and lose your money, you might be too frightened or embarrassed to complain.
More information about investing and tax
FIDO’s two tax-time tips
How tax schemes really work A tale of two investors
Investing to reduce your tax? Watch out!
Borrowing money to reduce your tax
Are financial adviser fees tax-deductible?
Investing in agricultural schemes | Investing in films
ASIC found that some tax-driven mass-marketed schemes have poor compliance: Our report looked at the relationship between high commissions for advisers and inappropriate or misleading advice to encourage investors to invest in such schemes.
International investing | Offshore tax havens
Tax Office information
Offshore tax havens
The Australian Tax Office (ATO) has issued 'Tax havens and tax administration' to help you understand the legal and illegal use of offshore tax havens. The booklet identifies potential risk areas, including an Antigua-based corporation promoting prime bank guaranteed debentures claimed to be returning 156% a year. So-called prime bank debentures like this are notorious scams. Visit their website for a copy of ATO's 'Tax havens and tax administration'.
Tax planning
The ATO has a list of statements about tax that you might hear when you're offered an investment. There's also a list of features to watch out for. They warn that if it's too good to be true it proabably is. Visit their website for ATO's warnings about tax planning.
Tax alerts
Taxpayer alerts are early warnings of ATO concerns about significant and emerging potential aggressive tax planning issues or arrangements that ATO has under risk assessment. Visit their website for ATO's alerts about aggressive tax planning.
FIDO Website: Printed 02/09/2010
