$6b losses disallowed

THE Australian Tax Office has disallowed more than $6 billion in losses claimed over the past three years by a variety of entities – some owned by wealthy individuals.

Tax commissioner Michael Carmody said artificial loss creation and attempts to get around rules preventing trafficking in losses were examples of aggressive tax planning arrangements pushing the boundaries of law.

“Artificial loss creation schemes share many of the characteristics of other aggressive planning arrangements we have dealt with recently, including limited recourse loans, round robin transactions, related party dealings and inflation of deductions,” Mr Carmody said.

Loss abuse has been detected across a range of groups including small and large businesses.

“The High Wealth Individual Taskforce is examining significant losses in many audits,” Mr Carmody said.

“A particular area of concern for the taskforce is the substantial losses claimed by some research and development syndicates,” he said.