The Australian Taxation Office (ATO) is making a new 'naughty list' and checking it twice. Specifically, it's coming after five years' worth of previous tax returns in a bid to flush out dodgy claims relating to lifestyle assets. Here's what you need to know.
Australia's tax office has announced it's going to be looking more critically into lifestyle assets, like expensive yachts and fine artworks, in an effort to crackdown on misreported wealth. And it's looking back at people's previous records.
The ATO has revealed it's going after five years worth of data from more than 30 insurance companies around Australia in an attempt to ensure "taxpayers are fulfilling their tax and superannuation reporting obligations."
The data, from 2015–16 until the most recent 2019–20 tax year, will give the ATO a better idea of which taxpayers own high value lifestyle assets, including marine vessels, thoroughbred horses, fine art, high value motor vehicles and aircraft, but aren't reporting it to the authority in an effort to reduce their tax bill. Basically, boujee people beware.
"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," Deborah Jenkins, the ATO's deputy commissioner, said in a media release.
"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.
"Doing things like being untruthful about your income or failing to declare capital gains is effectively stealing from the community – and this is money the community is missing out on to pay for infrastructure and services we all rely on like schools, hospitals, and roads."
The ATO will be asking the insurers for data regarding assets over a certain monetary threshold so while your $100 artwork from the local markets might feel high value, it's not going to be applicable. What's actually going to be looked at is the following:
- Marine vessels exceeding $100,000
- Motor vehicles exceeding $65,000
- Thoroughbred horses exceeding $65,000
- Fine art exceeding $100,000 per item
- Aircraft exceeding $150,000
If you happen to be one of the lucky Australians to afford any of the above items, the new data will be passed onto the ATO's compliance team, which will help inform them who they might need to start hunting down for unpaid bills.
"Taxpayers selected for compliance activities are identified through other methodologies. The data is made available to our compliance teams to support their risk profiling of the selected taxpayers. Existence of an insurance policy may or may not prompt the compliance officer to pursue a particular line of enquiry," Jenkins said.
"If we discover incorrect GST input tax credit claims for items purchased for personal reasons, we’ll be following up and seeking full repayment on top of any applicable interest and penalties."
So if you can afford any of the high value items on the ATO's Christmas list, it's likely you'll be able to also afford the applicable interest and penalties that'll apply for not properly disclosing it too.
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