The ATO has requested insurance policy information from 30 insurers for lifestyle assets.
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
What are “lifestyle assets”?
- Marine vessels worth $100,000+
- Motor vehicles worth $65,000+
- Thoroughbred horses worth $65,000+
- Fine art worth $100,000 or more per item
- Aircrafts worth $150,000+
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.
Make sure to chat to your accountant for individual advice.
Read more on the ATO website.