The ATO has published a gazette notice in the Federal Register of Legislation that confirms their intention to acquire lifestyle assets data from an estimated 25 insurers on specified insured lifestyle assets that meet nominated thresholds. The data collected will be cross-checked against internal data holdings at the ATO. The insurers will be advised to notify their clients if included in this program and that their private information will be shared for data matching purposes.
These assets include marine vessels worth at least $100,000, motor vehicles worth at least $65,000, thoroughbred horses worth at least $65,000, fine art worth at least $100,000 per item, and aircraft worth at least $150,000.
Data collected will include details on the owner, such as their names, dates of birth, contact details, and Australian business number. Various policy details will also be sourced, including policy number, inception date, the purchase price of the asset, total value insured, policy cost, and any registration details of the asset.
The ATO estimates that about 300,000 such policyholders will be identified for each financial year. The data collected will relate to the 2020-20 to 2022-23 financial years. This is a continuation of the program that has previously run from the 2013-14 to 2019-20 financial years.
The purpose of this program is to allow the ATO to identify taxpayers that report insufficient incomes in their tax returns yet are acquiring or improving assets of such value that their finances do not seem to support. It also seeks to identify taxpayers that dispose of assets at a profit and fail to declare those capital gains or revenue in compliance with the income tax and capital gains tax (CGT).
This is similar to more recent efforts by the ATO to identify those that make cryptocurrency gains when trading without fulfilling their tax obligations. The ATO has started carrying out data-matching with data collected from cryptocurrency designated service providers to identify asset holders and match this to their tax returns. Crypto asset holders have been advised to consider this the same way as any other investment like shares and ensure they report and pay tax on any capital gains made.
The lifestyle assets data-matching program will be used to further identify those trying to game the system of goods and services taxes (GST) by using business funds to purchase assets for personal use, thereby claiming GST credits where they should not. It will also identify similar cases where fringe benefits taxes (FBT) are also being avoided by purchasing assets through business entities for the personal enjoyment of associates or employees. Assets bought through self-managed super funds (SMSFs) that are used to benefit the fund’s trustee or beneficiaries will also be captured.