ATO Zeros In On Lifestyle Assets
What you need to know.
The ATO has extended its lifestyle asset data-matching program for the 2020–21 financial year through to 2022–23, allowing it to acquire insurance policy information for certain asset classes.
Motor vehicles with values of $65,000 and above will fall within the ATO’s data collection scope, as well as marine vessels above $100,000, thoroughbred horses over $65,000, fine art over $100,000 per item, and aircraft over $150,000.
The ATO will acquire the data from 25 insurance providers, with the agency expecting 300,000 individuals to be identified each year.
The data-matching program, which has been in place since 2016, will give the ATO oversight over individuals who have been untruthfully declaring insufficient income in their tax returns despite accumulating assets.
Taxpayers who dispose of assets and do not declare the revenue and capital gains on these disposals will also be identified.
According to the ATO, it will also help identify taxpayers who are purchasing assets for personal use through their business or related entities, and claiming GST credits they are not entitled to, or those who are using those assets for the personal enjoyment of an associate or employee which may give rise to a fringe benefits tax liability.
The program will also be used to identify SMSFs that may be acquiring assets, but applying them for the benefit of the fund’s trustee or beneficiaries.
Where an individual has been identified for not complying with their tax obligations, the ATO said it will apply “appropriate treatment recommendations”, but noted that it will not result in the “automated generation of compliance activities”.
“Where a taxpayer is correctly meeting their obligations, the use of the data will reduce the likelihood of contact from us,” said the ATO.
“In cases where taxpayers fail to comply with these obligations even after being prompted and reminded of them, escalation of prosecution action may be initiated.”
Data collected by the ATO will be retained for five years.
Further help
- If you suspect that you have failed to comply with your tax or superannuation obligations we encourage you to speak to your tax advisor or make a voluntary disclosure to the ATO. Taxpayers who make a voluntary disclosure can generally expect a reduction in the administrative penalties and interest charges that would normally apply.
- If you have any questions about issues raised in this article or need further advice, please contact our tax specialists. You can reach us on (07) 3023 4800 or at mail@marshpartners.com.au.
- As your Absolute.Account.Ability to partner, we’re on a mission to make your business life better. We’ll help you set goals for your business or financial goals, devise an Action Plan to make them happen and meet with you regularly to ensure you stay on track. You can find out more about working with Marsh & Partners here.
