Lifestyle assets continue to be an ATO audit Target

It has been made public that the ATO will be requesting a further five years’ worth of insurance policy information from over 30 insurance companies about taxpayers who own lifestyle assets like marine vessels, thoroughbred horses, fine art, high-value motor vehicles and aircrafts.

They are expecting to receive information about assets owned by around 350,000 taxpayers from 2016 to 2020 as part of its data-matching process.

The ATO’s data-matching process has been in place since February 2016, and have already collected data for the 2014 and 2015 financial years.

The information will be used by the ATO as part of its compliance profiling activities. It will help identify taxpayers who may understate their income and identify taxpayers who have made capital gains on the disposal of certain assets but who have not declared this to the ATO.

For example, ATO Deputy Commissioner Deborah Jenkins said:

“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”

The data will also be used by the ATO to identify incorrect claims for GST credits where taxpayers are incorrectly claiming GST credits as if the private item was a business asset.

Insurers are required to provide the ATO with detailed policy information where the value of assets is equal to or exceeds the following thresholds: