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New ‘lifestyle assets’ on taxman’s hit list
The ATO has announced its plans to crack down on “lifestyle assets” as the government agency tries to receive a larger share of tax revenue.
New ‘lifestyle assets’ on taxman’s hit list
The ATO has announced its plans to crack down on “lifestyle assets” as the government agency tries to receive a larger share of tax revenue.
In its announcement, the Australian Taxation Office is requesting an extra five years worth of policies from 30 insurance companies around expensive assets that might not match income statements.
The taxman is specifically targeting marine vessels, thoroughbred horses, fine art, high-value motor vehicles and aircraft.
ATO deputy commissioner Deborah Jenkins believes knowing who owns lifestyle assets such as private jets and yachts will help the government service get a complete picture around the financial situation of taxpayers compared with what is reported.
“If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a $3 million yacht, then this is likely to raise some red flags,” Ms Jenkins said.
“Regardless of your level of wealth, we all need to pay the correct amount of tax, and this data will allow us to ensure those people who can afford these kinds of items are doing the right thing, along with everyone else,” Ms Jenkins continued.
Aside from helping identify taxpayers who may be understating their income, the data from insurers may be used by the ATO to identify taxpayers who have made capital gains on the disposal of certain assets but who have not declared this to the ATO.
“With high-value assets like fine art, there can be some significant capital gains made when these assets are sold, and capital gains tax may need to be paid on the sale or disposal of these items,” Ms Jenkins said.
Insurers will be required to provide the ATO with detailed policy information where the value of assets is equal to or exceeds the following thresholds:
- Marine vessels: $100,000
- Motor vehicles: $65,000
- Thoroughbred horses: $65,000
- Fine art: $100,000 per item
- Aircraft: $150,000
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