Mr Murphy asked the Treasurer, upon notice, on 13 February 2003:

(1) Did the Taxation Commissioner, Mr Michael Carmody issue a warning on 11 February 2003 to small business owners in relation to those individuals who participate in tax avoidance schemes by using fixed trusts to distribute profits into self-managed superannuation funds and thereby expect to receive the 15% concessional rate of tax.

(2) Is the Australian Taxation Office (ATO) investigating those schemes; if so, what is the outcome of the ATO's investigation; if not, why not.

(3) Is he aware whether any (a) barristers or (b) solicitors are (i) personally participating in or (ii) promoting these schemes to their clients; if so, how many barristers and solicitors have been identified.

Mr Costello (Treasurer) —The answer to the honourable member's question is as follows:

(1) The Commissioner of Taxation issued a Taxpayer Alert on 11 February 2003 to provide an early warning to taxpayers of the issues arising from a scheme that uses an interposed fixed trust to distribute profits into a self managed superannuation fund.

(2) Taxpayer Alerts are designed to provide an early warning to taxpayers of arrangements that the ATO is investigating. Investigations are not yet complete.

(3) One of the benefits of issuing early warnings is that potential participants are aware of the ATO's concerns before deciding whether or not to enter into an arrangement or claim the tax benefit. The Commissioner of Taxation is continuing his investigations but at this early stage he advises promotion of this arrangement was not aimed at solicitors and barristers and there does not appear to be any significant participation by these groups.