In the old days, tax officials could be seen driving around the ‘burbs looking for signs of opulence that didn’t match your income.
Now, with everything that needs to be known available digitally, data matching can uncover income that doesn’t seem to match lifestyle in a fast and effective manner.
The ATO it is now working with insurance providers to identify Australians with policies covering an expanded range of luxury assets.
Watch out if you have insured any of these types of assets – marine, aviation, enthusiast motor vehicles, fine art and thoroughbred horses – to cover for damages or loss.
The ATO is matching the value of the insurance on these items to identify the wealthy lurking among us, and says this information will be used by it to get a more accurate estimate of the true wealth of individual taxpayers.
Starting from the beginning of this year, the ATO has commenced issuing formal notices to insurers to provide these policy details. Based on specific criteria, it expects to receive 100,000 records that may require further examination.
Please check your policies to make sure that you are insured via correct entity, especially if you are small business entity. From our experience, many of the ‘please explains’ may just come from administration errors and not anything mischievous.
Please contact us at Platinum Accounting & Taxation if you are concerned with any of your luxury assets.