SMSFs and dividend stripping arrangements

SMSFs and dividend stripping arrangements

SMSFs and dividend stripping arrangements

Editor: In November 2015, the ATO made an offer to SMSF trustees who may have implemented a dividend stripping arrangement substantially similar to the one described in Taxpayer Alert 2015/1 (TA 2015/1).

SMSF trustees were invited to contact the ATO to make a voluntary disclosure to correct the tax position resulting from such arrangements. That offer was opened in November 2015 and ended on 15 February 2016.

The ATO has provided a further update regarding this offer.
“While we are happy with the response we have received to date from affected trustees. We believed there may be many more SMSFs that have arrangements in place similar to the one described in TA 2015/1.

“Many trustees contended to distinguish their SMSF from the arrangement contained in TA 2015/1 by providing additional information. Upon review of the information, we have granted them another opportunity to consider the Offer where we believe their arrangement is substantially similar to TA 2015/1.

“We have since advised them that in order to evaluate their arrangements we will commence compliance action on the SMSF and its associated entities.”

Going Forward
“We recognise some arrangements may look right and trustees think the advice they have received is sound, but there may still be underlying problems such as those identified in TA 2015/1. We don’t believe trustees should be harshly punished when they think they have done the right thing.

“Trustees who are uncertain about the arrangements they are involved in are encouraged to engage with us and, if necessary, seek an early resolution to any dispute. Consideration will be given to reduced penalties in accordance with our remission guidelines.”

“While the vast majority of advisers provide excellent service to protect their clients’ interests, any advisers or other individuals found to be promoting these or similar arrangements will leave themselves open to the possibility of prosecution under the under the promotor penalty laws.”

Editor: Anyone wanting to contact the ATO regarding this issue is advised to email them at SMSFStrategicCampaigns@ato.gov.au, putting ‘TA 2015/1’ in the subject line, and including the SMSF trustee names, their contact details, and a time that is convenient for the ATO to call them.

Ref: ATO website, 18 May 2016

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