SPECIALISING in tax law was a logical move for Robert Sceales.
Mr Sceales has been practising as a lawyer since 1971, originally in his native South Africa but for many years in Australia.
His early legal work was diverse, covering everything from motor crashes to criminal cases and liquidations.
He was drawn to tax because he found it was central to many of the matters he worked on.
“Tax affects everything you do from the time you are born to the time you die, and even after that,” Mr Sceales said.
He also likes to recount the fate of 1930s gangster Al Capone, who was finally brought to justice by the United States’ Internal Revenue Service rather than the police.
Likewise, Australia’s National Crime Authority has used tax law to attack motorcycle gangs, by issuing tax assessments against gang members.
Mr Sceales was a partner at national law firm Phillips Fox before leaving in 1994 to establish his own specialist tax practice, Sceales & Company.
He clearly did not like the managerial style of a large national firm, preferring instead to run a small practice with just four lawyers.
“The pleasure of working in a place like this is the utterly flat management structure. You can get together and decide to do something, and it is done straight away,” Mr Sceales said.
“In a big firm its usually someone in Sydney or Melbourne setting the rules or telling you what to do.”
Mr Sceales readily acknowledges that small practices like his own will never achieve the same level of profitability as large firms, which are tending to employ a higher ratio of junior staff to partners.
But he is quite happy with the trade-off, having made a comfortable living from his own business.
Most of Mr Sceales’ work is sourced from accountants, rather than direct dealings with clients.
“I always prefer to deal with the accountant. They know we won’t try to poach their clients,” he said.
His work covers a broad range of personal matters, such as divorces, wills, family trusts and enduring powers of attorney, as well as commercial matters.
Mr Sceales’ business partner, Jocelyn Boujos, has a specialist focus on arranging product rulings for managed investment schemes.
Mr Sceales is surprisingly blunt in his assessment of managed investment schemes such as Budplan and Satcom, which have fallen foul of the tax office.
In particular he is critical of schemes that advanced loans through related companies so that investors could obtain big up-front tax deductions.
“That has always been incredibly aggressive because I can’t see the commercial logic of it,” Mr Sceales said.
“To me, it’s devoid of any commercial reality”.
Mr Sceales is also critical of the ATO for its failure to act early against aggressively structured managed investment schemes.
He sees this as part of a broader problem based on the complexity of tax legislation.
“The only reason we need all of these product rulings and determinations [from the tax office] is because the act is so badly written,” Mr Sceales said.
Mr Sceales believes the core of the problem needs to be tackled.
“The original act, the 1936 act, was amended and amended,” he said.
“Then they would bring in anti-avoidance sections. Then they had the overall anti-avoidance section [Division 4A].
“There were lots of us who said the act was so badly drafted it should be redone. So then they came up with the 1997 act. Now that is written in baby talk – parts of it are utterly incomprehensible.
“There is a crying need to appoint about four people in practice to redraft the whole thing.”
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