The Australian Tax Office (ATO) have now extended its lifestyle assets data matching program for the 2020-21 financial year through to 2022-23. This allows the ATO to acquire insurance policy information for certain asset claims directly from the Insurers.
The ATO’s scope for data collection now includes:
- Motor vehicles valued over $65,000 (new or used)
- Marine vessels above $100,000
- Thoroughbred horses over $65,000
- Fine art over $100,000
- Aircraft’s 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.
Individuals who have been identified as not declaring insufficient income in their tax returns to support such assets will now be within the radar.
This will further extend to taxpayers who may not be declaring capital gains when disposing of assets.
According to the ATO, taxpayers who purchase assets for personal use through their business and claiming GST credits (which they may not be entitled to) will also be caught out. As well as 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.
Trustees of SMSFs also need to be on the lookout and be extra diligent. Simply having assets within a superannuation fund does not exempt it from the ATO getting dose of information. Trustees must ensure that the assets are for the benefit of the Superfund and not for the benefit or enjoyment of the members of the Fund.
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 may not result in the “automated generation of compliance activities.”
“In cases where taxpayers fail to comply with these obligations even after being prompted and reminded of them, escalation for prosecution action may be initiated.”
Data collected by the ATO will be retained for five years.
The extension of the lifestyle assets data-matching program comes as the ATO increasingly relies on similar programs — including its work on motor vehicles and cryptocurrency — to ensure taxpayers are meeting their tax and super obligations.
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