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June 2010 - Warning From ATO

Making investment decisions - have you done your research?

Are you considering a tax-effective investment? It's important you have all the facts to make an informed decision.

Some investments offer tax benefits such as reducing assessable income or increasing deductions, but end up being outside the law. You can check with the ATO to ensure promised tax benefits will be available.

Find out as much as you can about an arrangement before investing. Make sure the arrangement has a prospectus or product disclosure statement and get independent advice about the promised tax benefits from a professional advisor. A person associated with the scheme is not independent.

Start by visiting www.ato.gov.au/investing and read the Investigate before investing fact sheet. It provides information about tax effective investing and how to detect potential tax avoidance schemes.

You can also check if the arrangement you're considering is covered by an ATO product ruling confirming the tax benefits, or if a Taxpayer alert has been issued warning about the arrangement.

Doing your research will help you avoid negative consequences including having to repay tax and incurring interest and penalties.

Further information

The following fact sheets are available on our website at www.ato.gov.au:
§ Recognising and reporting tax avoidance schemes - for tax agents
§ Making tax effective investment decisions - for sophisticated investors
§ Tax planning - investigate before investing - for general investors

These fact sheets, along with more information for investors, are available on the Aggressive Tax Planning home page.

Stefan Kovic
Assistant Commissioner
Aggressive Tax Planning


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