The ATO will obtain significantly more information on insurance policies for certain classes of assets, including marine vessels, motor vehicles, thoroughbred horses, fine art and aircraft. We highlighted this data matching program which was in place for Tax Time 2019, and the new information will cover the 2015-16 to 2019-20 financial years in respect of the following classes of assets:
- Marine vessels valued over $100,000
- Motor vehicles valued over $65,000
- Thoroughbred horses valued over $65,000
- Fine art valued over $100,000 per item
- Aircraft valued over $150,000
The ATO anticipates obtaining records of more than 350,000 policies which will be used to profile tax payers for compliance activities identifying specific tax risks, including:
- Asset betterment – where taxpayers acquire or improve expensive assets without the visible income to show how they have paid for it
- Income tax and capital gains – where taxpayers disposing of assets have not declared the income and/or capital gains
- GST – where taxpayers have purchased assets for personal use through their business or related entities and claimed input tax credits they are not entitled to
- FBT – where taxpayers have purchased assets through their business entities, but apply those assets to the personal enjoyment of an associate or employee giving rise to an FBT liability
- Superannuation funds – where self-managed superannuation funds have acquired assets but the fund’s trustees or beneficiaries have used them for their own benefit
This extends the ATO’s lifestyle assets data matching program which has been in place since February 2016.
The ATO will use this data to assist in profiling taxpayers for future audits. ATO compliance officers will review this information together with data from a variety of other sources to determine if an audit into the taxpayer is required.
Your Bentleys team are experts in assisting you manage your tax risk and profile so contact your Bentleys advisor today to discuss your next steps.