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Tax break multiplies division

TAX scheme investors have won a reprieve in their long-running battle against the Australian Taxation Office but underneath the seemingly united front there are big differences on just how the matter should be resolved.

After a battle spanning three years, up to 30,000 investors have finally applied enough political pressure to force an apparent change of heart from the ATO.

But among those representing investors to WA’s high profile politicians like Julie Bishop, Daryl Williams and Wilson Tuckey there are some major differences as to how to tackle the issue given the new political environment in the State.

In one corner are those who have successfully called for a test case. They are keen to take the matter through the courts where they are confident of success.

But there is a another school of thought, which believes the issue has been handled badly from the beginning and the only way to remove the uncertainty of legal action is to settle the matter.

Both of these voices share some common views. At the very least, they allege the tax office has been heavy handed in its treatment of investors and both believe that promoters should have been targeted before investors.

But when it comes to resolving this politically explosive matter, they diverge.

Resolution Holdings director Clive Ross will not say how many investors he represents but he claims that his clients have hundreds of investments in at least 70 projects.

Mr Ross said the way out now is to find a compromise which allows to tax office to recoup some of the $500 million it is said to be demanding from tax-effective investors but also provides a ceiling on what individuals might have to pay.

The Applecross-based former tax collector, who was involved in the tax-effective operation for the ATO, made it quite clear that no promoters were involved in his organisation.

He said said there were big risks for investors in the current climate, particularly because the tax office has not put a moratorium on interest rates associated with disallowed deductions.

"The synopsis is don’t be fooled into thinking that your position is safe and you can sit back," Mr Ross said.

"It is a PR exercise to take some heat off the matter.

"The reality is it will take one to two years to get to court."

"I think there is recognition there that a sensible compromise would be a fair way of dealing with it.

"If you could get a settlement on something better than these terms people should take it, I think that is a reasonable position."

Lawyer Frank Wilson, of Wilson & Atkinson, agrees a settlement would be possible but only if the ATO vastly changed its terms, otherwise a compromise position was out of the question.

"I strongly disagree on the terms currently being offered by the ATO," said Mr Wilson who has long provided legal advice to the industry.

Instead, he is confident that he has a winnable case which will be resolved by the courts by the end of the year.

"There is no point in settling a case under unfavourable terms if you can get a better outcome in court."

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