Tax Office warns on abuse of tax perks
The Tax Office has warned partners in law, accounting, engineering and medical firms who reduce their tax bills by income splitting with their spouses that it's reassessing the rules governing the practice, after uncovering abuse linked to self-managed superannuation funds and related-party borrowing.
The ATO abruptly suspended the old rules for allocating profits within professional services firms on December 14 and has advised anybody wanting to enter into new arrangements not to rely on previous rules. The change is likely to affect thousands of high-earning tax payers typically professionals in partnerships.
Read the full article on the Australian Financial Review.