The Australian Taxation Office (ATO) will commence a data matching program to obtain information on insurance policies for lifestyle assets, including boats, yachts, enthusiast motor vehicles, thoroughbred race horses, fine art and aircraft.
Under the program the ATO will obtain information from certain insurance providers for the 2013/14 and 2014/15 financial years. It is estimated that the ATO will obtain the records of more than 100,000 policies. This data will allow the ATO to better identify those taxpayers who are not fully complying with their obligations, and those operating outside the taxation and superannuation systems altogether, in addition to creating a more comprehensive profile of a taxpayer’s wealth. The program will also allow the ATO to identify and address taxation risks that surround asset betterment, income tax and capital gains, GST, fringe benefits and superannuation funds.
The ATO’s program follows a growing trend toward using data matching in order to have a more comprehensive understanding of a taxpayer’s wealth and compliance with tax obligations.
The announcement is an important reminder for taxpayers as to how their lifestyle assets may affect tax obligations and the ability for the ATO to access information regarding these assets from insurance policies
If you are uncertain of your tax obligations in relation to the acquisition, improvement and disposal of lifestyle assets, contact our tax team who have specialist knowledge in this area. We can provide you with help in relation to areas such as:
understanding the income tax implications associated with disposing of lifestyle assets and the application to you;
understanding Division 7A consequences of having a personal use asset held by a corporate beneficiary;
considering your Goods and Service Tax obligations if purchasing lifestyle assets through businesses;
understanding Fringe Benefits Tax obligations associated with the use of business lifestyle assets by you or your employees; and
the ability for self-managed superannuation funds to acquire lifestyle assets.
To discuss this further or for more information please contact:
T +61 3 9611 0194