Inherited client problems: new clients, old problems… The 49th Western Australia State Convention

Often when taking on new clients, tax practitioners get lumped with a large inheritance. A large inheritance of old problems, that is. New clients, old problems seems to be an everyday experience for tax practitioners. Same same but different, right?

“Often a previous adviser may have unintentionally or otherwise acted in a manner that leaves issues which need to be addressed and often require realignment,” says Ken Schurgott, CTA (Life) of Brown Wright Stein Lawyers.

That ‘realignment’ or adjustment can range from a relatively innocuous self-amendment to a full-blown disclosure to the ATO and a consideration of significant penalties. Ken will be passing on his considerable experience in ‘Solving Inherited Client Problems’ at The Tax Institute’s 49th Western Australian State Convention on 11-12 August 2016. Ken will provide practical insights and options to manage these situations. “I’ll also be discussing what an adviser’s obligation is when a client presents with these issues,” Ken comments.

First, seek to understand

Dealing with inherited client issues is always difficult. Ken notes, “Understanding time limits for amendment is crucial, both in an advantageous and disadvantageous way. The delicate issue of whether there has been fraud or evasion will sometimes need to be addressed.”

When discussing issues with a new client, they will often need to be convinced that there is a need for amendment and that will often turn on being able to explain how time limits work for a range of taxes. Ken believes it’s vital to fully understand section 170 of the Income Tax Assessment Act 1936 and other provisions which deal with time passing.

But there is more in the tangle of tax laws which deal with fixing up past problems, and difficult interpretive issues often arise. For example, how do you apply the principles emerging from the Metlife case when the unlimited CGT amendment period is in question? [1]

“Then there’s the worst issue of the lot: what is to be done when it is you, or your firm, that has provided the bad advice,” Ken warns.

A roadmap to manage these issues

During his session Ken will look at past Div 7A non-compliance defective restructures, inefficient structures, non-compliance with the personal services income rules and exposures arising from alienated personal exertion income, as well as historical aggressive tax strategies.

Tax and Commercial Law Director with Schurgott & Co Lawyers, Ken Schurgott CTA (Life) is also Special Counsel with Brown Wright Stein Lawyers, Sydney. He has extensive experience in all aspects of tax, as well as business structuring, business sales and acquisitions, asset protection, trust and estate law. Until recently he was a member of the Advisory Panel to the Board of Taxation.

Ken will also be running a workshop session at the Convention, ‘Exiting Business Structures’, which will illustrate some of the more difficult issues in selling to third parties, transferring control in a corporate joint venture, accessing cash without disproportionate tax liabilities, and using concessional tax treatments.

Hear the latest thinking on inherited client problems, exiting business structures, and a wide range of other topics at the 49th Western Australian State Convention taking place 11-12 August 2016 at the Novotel Vines Swan Valley Resort. Choose from 21 sessions over two days, across two streams – SME & Corporate, and includes up to 13 CPD hours. Find out more.

Metlife Insurance Ltd v Commissioner of Taxation [2008] FCAFC 167.


See all

Follow Us