With the 2016 Spring Racing Carnival just around the corner and summer not too far behind, your thoughts could be focused on purchasing that thoroughbred racehorse or the 50ft yacht you have always dreamed of. Be warned though, the ATO will request information from insurance providers on insurance policies held for certain classes of assets.
The ATO has advised that “this data will improve our profiling of taxpayers and provide a more comprehensive view of their assets and accumulated wealth”. In other words, they want to know more about the income, wealth and tax compliance of those who purchase such lifestyle assets.
It also means that the ATO can make more accurate estimates of someone’s wealth to ensure that they meet their tax obligations. The ATO defines a wealthy individual as “resident individuals who, together with their business associates, control net wealth over $5 million”.
The following table illustrates the asset class and asset value threshold about which data will be collected:
|Asset Class||Asset Value Threshold|
|Marine vessels||> $100,000|
|Enthusiast motor vehicles||> $ 50,000|
|Thoroughbred racehorses||> $ 65,000|
|Fine art||> $100,000 per item|
It is anticipated that the ATO will obtain records of more than 100,000 policies, many of which will be held by individuals. The data matching program will allow the ATO to identify and address risks in a number of areas, including:
- asset betterment
- income tax and capital gains
- superannuation funds
When a discrepancy is detected that needs verification, the ATO will contact the taxpayer by phone, letter or email. Should you find yourself on the receiving end of a query from the ATO, we recommend that you do not ignore it. The ATO advises that they will provide the taxpayer with the opportunity to verify the accuracy of the information before any administrative action is taken.