22: Help Sheet B Tax Advice

Question 1

When a member has a genuine reason whether they have breached the Standards of Tax Planning or not, they should follow these steps:

Answer 1

1. Document reasoning and outcomes
2. assessment of uncertainties and risks
3. assessment of relevant disclosures

Question 2

Can I member be involved in tax evasion

Answer 2

No, a member should never be involved in tax evasion, it is illegal.

Only if it the client is dealing with ‘rectifying their affairs’.

Question 3

a member must not ‘………, ………. or ……….. tax planning arrangements that are contratry to parliament enactment or that are highly artficial or highly contrived.

Answer 3

create, promote or encourage

Question 4

Thigs to consider with tax planning (10+) (try get 4-5)

Answer 4

• How tax sophisticated is the client?
• What are the risks associated?
• apply to GAAR?
• Does the tax planning take into account the 5 standards of tax planning?
• Does your engagement letter set out a clear scope of services?
• Has the client made clear what they want to achieve with the tax planning?

Question 5

When talking about advising clients of tax planning under the law,

It is more the _____ of the tax advisor, not the ___ ______ of the client

Answer 5

behaviour, tax outcome

Question 6

Do you need an engagement letter for tax planning?

Answer 6

It is strongly recommended as it clearly sets the scope of work between the client and member

Question 7

If you are asked by a member for a second opinion in tax planning, should you take commission?

Answer 7

No. It compromises objectivity

Question 8

Consequences when you create, promote or encourage tax planning that goes against the PRPG and standards of tax planning?

Answer 8

Sanctions from reprimand to exclusion

Question 9

Should you refer a client to a tax advisor for tax planning if you know they are at higher risk of arrangements that are highly artificial or highly contrived?

Answer 9

This would be classed as ‘encouraging’ therefore would be going against the standards of tax planning.

If you are uncertain whether or not they offer advice that may be highly artificial or contrived, you must inform the client of the risks assocaited and must document your reasons for making referral.