Bottom of the harbour tax avoidance
More detail and history at the link.Bottom of the harbour tax avoidance was a form of tax avoidance used in Australia in the 1970s. Legislation made it a criminal offence in 1980. The practice came to symbolise the worst of variously contrived tax strategies from those times.
In its 1986/87 annual report, the Australian Taxation Office (ATO) stated a total 6,688 companies had been involved, involving revenue of between $500 million and $1 billion.
Operation
The operation at the heart of bottom of the harbour schemes involved a company that would be stripped of assets and accumulated profits before its tax fell due, leaving it then unable to pay.
Once assets were stripped, the company would be sent, metaphorically, to the "bottom of the harbour" by being transferred to someone of limited means and with little interest in its past activities. The company's records were often lost too. The ATO, being in the same position as other unsecured creditors in the case of an insolvent company, ended up with nothing.