What regions are Millennials moving to?
The March quarter saw migration into regional centres from capital cities increase by 16.6 per cent, with this trend lar...
Investors using trust structures to hide income from developments may face steep fines, the Australian Taxation Office has warned.
The ATO has undertaken to audit developers to ensure their adherence to regulations.
Increasingly, some people are using trusts to mischaracterise their development activity and claim a discounted tax rate, deputy commissioner Tim Dyce said.
“A growing number of property developers are using trusts to suggest a development is a capital asset to generate rental income and claim the 50 per cent capital gains discount,” he said.
“Our enquiries indicate that these arrangements are contrived and some property developers are inappropriately claiming capital gains tax concessions.”
ATO scrutiny over these activities is set to increase this year, Mr Dyce announced.
“The ATO has already raised millions in adjustments from people who exploit the system and our current compliance activity shows we are likely to make many more adjustments in the coming months,” he said.
He warned investors to declare their income from their construction activity or risk severe penalties.
Fines of up to 75 per cent of the tax avoided may apply to those found to be misusing special purpose trusts, the ATO stated.