We understand the ATO is preparing to issue section 264 notices
to some accountants, requiring the production of documents relating
to dividend access shares.
It is vital that a section 264 notice is dealt with promptly.
There are very limited opportunities for seeking an extension of
time or challenging a notice on the grounds that the timeframe for
responding is difficult, but there is some precedent for extensions
being granted where the taxpayer has to produce documents (rather
than attend an interview).
If an extension is needed, then it is important that the
application is made as soon as possible after receipt of the notice
and is backed up by legal submissions.
A failure to comply with a section 264 notice is an offence,
punishable by a fine or (for multiple breaches) imprisonment.
A section 264 notice will not compel a person to produce
documents subject to legal professional privilege. However, anyone
receiving a section 264 notice needs to be careful that any
documents claimed to be subject to legal professional privilege are
actually privileged according to the law.
Given the recent ATO publications and audit activity around
dividend access shares, clients may want to review their use of any
dividend access shares in the past. The ATO is generally subject to
a four year amendment period, but there are exceptions to this. For
high risk arrangements, there are opportunities for reductions in
penalties for voluntary disclosures in certain
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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