Do you own a Luxury Lifestyle Asset?
The Australian Tax Office have announced that they will be cross referencing Insurance Policies for Luxury Lifestyle Assets as part of their Data Matching Program.
What is a Luxury Lifestyle Asset? Marine vessels over $100,000, enthusiast motor vehicles over $65,000, thoroughbred horses over $65,000, fine art works over $100,000 and aircrafts over $150,000 are the classes of assets the ATO are targeting.
The ATO have stated they will be obtaining records of more than two hundred thousand policies from companies like CommInsure, RACQ, YOUI, Zurich and Suncorp, over various income years to cross match with the income tax returns of the individuals that own these types of assets to ensure the income needed to purchase and maintain these types of assets has been reported. In doing this, they are wanting to make sure taxpayers do not have any undisclosed income and therefore not having met their tax obligations.
The ATO are concerned that businesses and individuals are working in a “cash economy” and are trying to avoid their tax obligations by engaging in activities such as paying cash wages, failing to report barter transactions and operating “off the books” and/or “underground”.
With this Data Matching Program in place there are many audit risks involved such as Capital Gains Tax, GST and Fringe Benefit Tax obligations. The ATO will identify Tax Payers who have claimed deductions in respect to these assets but who may not have considered the Fringe Benefit Tax implications that may arise.
Ally Wadwell | Accountant | The Money Edge | Bundaberg