The ATO Are Targeting Lifestyle Assets
The Tax Office have indicated that they will be using data from a number of insurance companies to assess and identify the owners of ‘lifestyle’ assets including boats, thoroughbred horses, marine vessels, aircrafts and collectables such as fine art and enthusiast motor vehicles.
The ATO will match the data against tax returns for the last two years to formulate an opinion on taxpayers who may have reported relatively low taxable incomes in their personal tax returns but who have accumulated significant lifestyle assets including:
- Marine Vessels - over $100,000
- Aircrafts - over $150,000
- Enthusiast Motor Vehicles - over $50,000
- Thoroughbred Horses - over $65,000
- Fine Art - over $100,000
Assets with a value below these thresholds will not be selected for review.
The ATO will gather information from a number of insurance companies including details of the insurance policy holder and the policy details. That means they will have access to owner’s names, addresses, phone numbers, policy number, policy period, the asset description, the insured value and the physical location of asset. It is estimated that more than 100,000 insurance policies will be obtained by the ATO.
They plan to match the details on the insurance policy with the information it already holds on taxpayers to identify non-compliance with registration, lodgement, reporting and payment obligations. The data collected will be used by the ATO to get a better snapshot of the assets and wealth of particular taxpayers and allow them to identify any possible compliance issues with income tax, capital gains tax, fringe benefits tax, GST and superannuation.
The insurance providers can notify clients of their participation in the program and the documents they have supplied to the ATO. As you would expect, the ATO have stated that it considers this as an opportunity to promote voluntary compliance and strengthen community confidence in the integrity of the tax system. Where there appears to be a discrepancy, the ATO will contact the taxpayer and give them the opportunity to verify the accuracy of the information prior to amending any income tax return.
We therefore recommend that if you own any of these so called ‘lifestyle assets’ that you revisit the insurance policy to ensure that all the policy details are correct and information in your financial statements and income tax returns is correct.
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