Are you fulfilling your tax and superannuation reporting obligations?
As part of an effort to ensure taxpayers are fulfilling both their tax and superannuation obligations, the ATO has approached insurers and asked that they provide policy details for lifestyle assets that sit above a particular threshold as part of their data-matching program.
The policy details are for a further five year period, from 2015-16 to 2019-20, from 30+ insurers in relation to taxpayers who own thoroughbred horses, fine art, marine vessels, high value motor vehicles and aircraft. The ATO expects that the information collected will relate to around 350,000 taxpayers who own assets that are valued at:
- Marine vessels – $100,000 or more;
- Motor vehicles – $65,000 or more;
- Thoroughbred horses – $65,000 or more;
- Fine art – $100,000 or more per item; and
- Aircraft – $150,000 or more.
The information collected in relation to lifestyle assets will be used by the ATO in their compliance profiling activities, with this kind of data being collated to form a clearer picture as to the financial situation of taxpayers, as opposed to what is just on their tax returns. The ATO have stated however that the data will not be used to initiate automated compliance activity, and that this is done through specific processes and methodologies.
“If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a $3 million yacht then this is likely to raise some red flags... Regardless of your level of wealth, we all need to pay the correct amount of tax, and this data will allow us to ensure those people who can afford these kinds of items are doing the right thing, along with everyone else." - Deborah Jenkins, Deputy ATO Commissioner
The information will be made available to the ATO compliance teams to assist in risk profiling of some taxpayers, as well as determining if anyone is understating their income or not declaring capital gains made on lifestyle assets. It will also be used to determine if any incorrect GST input tax credits have been reported, where assets have been purchased purely for personal use as opposed to businesses reasons and fines will apply, and some SMSFs asset purchasing will also be reviewed.
If you’d like to know more about the ATO and your lifestyle assets, speak to our experienced Sunshine Coast accountants at (07) 5471 7077 or complete our online accountant appointment request today.
Resources
Public Accountant (ATO sets sights on lifestyle assets): https://www.publicaccountant.com.au/news/ato-sets-sights-on-lifestyle-assets
