News
Avoiding Tax Traps: Here’s What You Need to Know
Heads Up on Investor Tax Offset Schemes The ATO recently released a Taxpayer Alert (TA 2024/1) warning about tax avoidance schemes targeting early-stage investor tax offsets. As your go-to tax advisors, we’re here to keep you in the loop and safe from these traps.
Here’s what’s happening:
The Scheme: Promoters are offering investment opportunities in start-ups they claim qualify as Early Stage Innovation Companies (ESICs).
The Catch: These schemes involve circular financing arrangements, where borrowed funds move between the investor, the start-up, and the promoter, aiming to exploit the tax offset.
The Risk: Many of these start-ups fail to meet the genuine ESIC criteria, potentially implicating innocent investors in tax avoidance activities.
Why This Matters to You: Engaging in such schemes, even unintentionally, can lead to serious consequences, including penalties. The ATO’s expanded promoter penalty laws (effective July 2024) mean harsher repercussions for those involved in or promoting these arrangements.
How We Can Help
Due Diligence: We’ll check the ESIC status of startups to ensure your investments are legit and qualify for real tax benefits.
Stay Compliant: Our team will guide you away from sketchy schemes, keeping your tax affairs clean and compliant.
Strategic Tax Advice: We’ll help you maximize your tax advantages within the ATO’s guidelines.
Contact us and Book an Initial Free Consultation
Thinking about investing in startups or curious about the investor tax offset? Get in touch before you leap. Let’s keep your finances and reputation safe.
Call us at 1300 513 332 or enquiry by clicking here.
Date published 30 Jan 2025
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