Too good to be true tax savings


“If it looks too good to be true, then it probably is”

How wise is this old saying, especially in this modern age of managing money. Clients often hear about investment opportunities and tax savings associated to them, and come to us for advice on how reasonable these proposals are.

It may sound odd for a tax adviser to say this, but we think that tax savings should not be the most important factor when you develop an investment strategy. Why?

Well, generally, investments that benefits heavily in terms of tax, more often than not get more ATO scrutiny. These investments’ designers often seek an ATO Product Ruling in advance, allowing potential investors to understand the underlying tax issues. Remember, a Product Ruling issued by the ATO does NOT mean the investment is endorsed by the ATO, but it simply sets out the ATO’s opinion on the potential tax impacts for those who invest.

So, instead of just the tax-savings aspect, as an investor, you should focus more on the investment’s commercial viability. It is always good to get a second opinion by discussing with your accountant.

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