Mortgage Brokers selling low-doc loans are the targets of and Australian Tax Office (ATO) probe into tax avoidance.
Take out a low doc loan is like raising the flag to have your affairs the subject of a tax audit.
The result has been numerous prosecutions involving borrowers and brokers. It is reported the most serious cases involved 16 finance brokers all who have been sent tax avoidance assessments.
As of July the ATO is said to have examined 133,000 loan records and uncovered 19,500 taxpayers with outstanding returns with at least 109 taxpayers being prosecuted. Convictions stemmed from failure to lodge tax returns or concealment of income. At least $24m in tax and penalties has been recouped.
Not everyone can qualify for a full income and security tested loan. Many Lo Doc borrowers are funding repayments from legitimate sources like inheritances and capital gains vis a vis property investments. Undoubtedly income has been concealed, most of it derived from the cash economy related to the building and construction industry.
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2 comments:
As a mortgage broker, I'd be very interested to know more about the prosecution of brokers for these offences. Can you name a judgment that I can look up?
The ATO media release can be found at http://www.ato.gov.au/corporate/content.asp?doc=/content/61711.htm
I had a quick look at the AUSTLii website for any specific cases but came up with nothing.
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