The Australian Taxation Office is urging all taxpayers with offshore assets to come clean and declare their overseas interests ahead of a global crackdown. Unfortunately the details in respect of the project are unclear and as a result many taxpayers are confused as to what this means and fearful of coming forward.
The following issues were considered:
- how does the Tax Office regard the taxpayer? In some cases ordinary taxpayers are dealing with legacy issues (e.g. parent disclosed to their children before they died that there was an account that existed overseas) v the taxpayer who deliberately evaded tax and has decided to have a clear conscience. Will the penalties be different?
- how long does it take to get a resolution?
- will the Tax Office only seek to collect the tax for the last 4 years or will it go to the principal sum? Does the fact the monies were held in an offshore accumulation trust mean the 4 year rule has no application?
- what is the go forward position of the taxpayer?