An extension of the Australian Taxation Office’s (ATO) data matching program means your yacht, Porsche or Archibald winner could be on its radar.
The ATO can now acquire lifestyle asset data from insurance policies for 2020-21 through to 2022-23 for assets where the value is equal to or exceeds nominated thresholds for the assets shown below.
|Asset class||Minimum asset value threshold|
|Fine art||$100,000 per item|
This newly released data from insurers consists of personal information including, addresses, ABNs, business names and full policy details – including the value of insurance policies, purchase prices and the physical location of insured property.
According to the ATO, the lifestyle assets data-matching program aims to:
- ensure that individuals and businesses are fulfilling their tax and superannuation reporting obligations
- encourage voluntary compliance and increase confidence in the ATO
- help compliance staff with a clearer picture of taxpayer’s wealth, and
- identify and educate individuals and businesses who may be failing to meet their registration and/or lodgement obligations.
The program also enables the ATO to identify taxation risks.
Risks include taxpayers accumulating or improving assets with insufficient income reported in their tax returns to justify this, disposing of assets and not declaring the revenue or Capital Gains Tax (CGT).
Taxpayers might also be purchasing assets for personal use through their business and claiming GST credits or purchasing through business entities with no apparent alignment with their business activities.
In some instances, the ATO believes SMSFs might be acquiring assets but applying them to the benefit of the fund’s trustee or beneficiaries.
What does this mean for you?
This data-matching program will identify taxpayers who are not fully complying with their obligations, as well as those that may be operating outside the taxation and superannuation systems. It will Increase the ATO investigations around assets compared with income and the thresholds shown above.
You can access a protocol for the ATO’s data-matching programs on the ATO’s website. Each protocol explains the purpose of the program, what data is collected, which agencies or organisations will be providing the data and how the data will be used.
You can also access a complete list of data-matching providers.
The ATO has been conducting data-matching programs since 2011, including the lifestyle assets data-matching program which commenced with collection of data for the 2013-14 financial year.
If you suspect you’ve made a mistake with your tax obligations, please speak with your tax advisor or make a voluntary disclosure to the ATO. Acting quickly may result in a reduction in the administrative penalties and interest charges.
For more information on the ATO’s data-matching programs, please contact your local William Buck Advisor.