In the past, tax officials could be seen driving around checking and looking for signs that showed your lifestyle didn’t match your income. Yet today with everything being available through digitally, today’s data matching can uncover income that isn’t matching the lifestyle in a more effective manner.
The ATO is now working with the insurance companies to help identify people with policies that are covering an expanded range of luxury items.
If you have insured any of these type of assets- marine >$100,000, motor vehicles >$50,000, fine art >$100,000, thoroughbred horses >$65,000 or aviation >$150,000- for damage or loss, you are now in the radar of the ATO.
The ATO is now matching the value of these kinds of policies to identify the wealthy among us and is stating that information will be used to receive a more accurate estimate of the income of the individual taxpayer.
From the being of the year, the ATO has been issuing notices to the insurance companies to provide policy details which meet specific criteria of which it expects to receive 100,000 records that may require future action.
Please check your policies to make sure that you are insured correctly in regards to entity type, especially if you are a small business entity. In regards to the “please explains” actions from the ATO, most have been administration errors and not from anything mischievous.
If you have any questions, please contact us in regards to any luxury assets.