The ATO has requested insurance policy information from 30 insurers for lifestyle assets such as yachts, thoroughbred horses, and fine arts. The ATO targets ‘lifestyle’ assets, so keep reading if you or someone you know may be on their radar!
The review, expected to impact 350,000 taxpayers, reaches from the 2015-16 to 2019-20 financial years, revealing assets that previously may not have been disclosed or underreporting of income. “If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a three million dollar yacht then this is likely to raise some red flags,” Deputy Commissioner Deborah Jenkins said.
The ATO is looking for:
- under-reporting of income and mismatches between lifestyle assets and reported income,
- the purchase of assets in a company name but where those assets are used for private purposes (incorrect claims or non-reporting of GST credits, FBT, Division 7A, capital gains tax), and
- lifestyle assets purchased by self-managed superannuation funds that might breach the sole purpose test.
The ATO has stated that the data matching will not result in automatic audits but will be reviewed by compliance officers to support the profiling of selected taxpayers.
Should you believe you are at risk of an audit or review from the Australian Taxation Office, get in touch with the Team at DGL Accountants at your earliest convenience – we are here to help!