Australians cracking down on Canadian-style abusive charity gifting tax shelters

December 16, 2010 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, Canadian Charity Law, Ethics and Canadian Charities, Avoiding 'Charity' Scams

A while ago, I got a call from Australia.  An investment advisor was wondering about certain Canadian individuals involved with what he thought were some pretty risky charity gifting tax shelter schemes in Australia. Anyway, I just read an Aggressive Tax Planning alert from the Australian government which “describes a leveraged donation arrangement where a taxpayer (donor) claims a gift deduction for pharmaceuticals and other items to a Deductible Gift Recipient (charity) for use overseas, which far exceeds the amount of cash outlaid.”  The market for these schemes in Canada seems to have collapsed as CRA is denying the amounts, former investors are complaining bitterly about the schemes and their promoters and even in some cases launching class action lawsuits against them.

Here is the Australian alert:


“Weekly update for Aggressive Tax Planning.

The following information is new on ato.gov.au since the last update:

TA 2010/8 - Gift deductions for donation of pharmaceuticals to charities operating overseas

This Taxpayer Alert describes a leveraged donation arrangement where a taxpayer (donor) claims a gift deduction for pharmaceuticals and other items to a Deductible Gift Recipient (charity) for use overseas, which far exceeds the amount of cash outlaid.

http://www.ato.gov.au/distributor.asp?doc=/content/Content/00263575.htm

Published: 06 Dec 2010”

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