Is the lack of business risk associated with arrangements to inflate, or artificially create, tax deductions?
* Actual cash moneys used by the manager for management services in the first 13 months obtained principally from the principal repayments and /or interest payments made by the investor. * The manager/promoter entities borrow from external sources and/or access retained earnings to enable the manager (or other promoter entities) to actually carry out the necessary services on behalf of the investor, and/or to fund capital expenditure. * The actual cash funds employed by the manager in the provision of services in the first 13 months represent a small proportion of the large up-front fees charged by the manager and claimed as a tax deduction by the investor. Do the arrangements represent a non-commercial and abnormal way of conducting an activity?
