it is important to understand the difference between Tax Minimisation and Tax Avoidance.

Tax Minimisation is where you arrange your affairs in a manner acceptable to the Australian Tax Office (ATO) to reduce the amount of tax you are required to pay. You are entitled to use your investment activities to minimize the amount of tax you have to pay. You are also entitled to claim legitimate tax deductions to reduce your taxable income.

Tax Avoidance is an artificially contrived arrangement whose purpose is to avoid or defer the amount of tax you have to pay.  Often referred to as “Tax Schemes” they are normally a complicated set of transactions, often using trusts and overseas entities in an attempt to reduce the amount of tax that would otherwise be payable.

The Tax Office can and does impose heavy penalties for those involved in Tax Avoidance Schemes, which can include a prison sentence.