Federal budget 2018 anti-avoidance rules extended to family trusts

Federal budget 2018: Personal tax crackdown to raise $1.1b

Can anyone explain how the round robin arrangement works to minimise tax?

 

I don't know how that could have worked.

In olden days it could have worked by Australian trust distributing ton a NZ trust which would then distribute it back. This worked because of the different tax years.

 

I understand it and have seen it. Its sort of legal but very dubious. (Part IVA is its greatest risk) I never explain avoidance.

 

Not in writing or on forums.

I bet you do a few 'lunch' meetings with clients!

pinkboy

 

I'm actual more likely to seek to understand how a scheme works and explain its flaws and how it will be attacked. Most are fundamentally over simplified errors based on gullibility and naive people being sold a great story by someone who over charges them. Greed is a common motivator.

One of the best wasnt a scheme and I had a client get an adverse audit review. It truly was not a scheme but my advice was to settle cause the ATO can destroy you with time and legal costs. It is sometimes illogical to fight a winning battle and you have to concede and retain wealth and dignity. He reached agreement with ATO by breaking away from the group (a private bank) and in doing so avoided penalties, lawyers and accounting costs. The head lawyer was a well known person who later wrote and recommended a funding model for Australian education.

All others who stuck to their guns just lined the QC and Barristers pockets and paid the ATO on top. Ironically he ended up making a mint from that investment as he was one of the few to afford to keep it. I recall the large CGT profit as he sold a month before the private bank went bust. He had funded the invention of secure wifi. The ATO had considered it a R&D scheme.