Taxpayers using special purpose vehicles to divert profits of property development projects into SMSFs beware, the ATO is reviewing these arrangements. According to the Commissioner, these non-arm’s length arrangements lack commerciality and have the effect of shifting profits that would normally be taxed at corporate rates to SMSFs which are taxed concessionally. Among other things, the ATO will be considering whether dividends and franking credits received by SMSFs in these arrangements should be taxed at the top marginal rate, and NALI consequences.
Click to read our article: ATO alert: diverting profits to SMSFs