Lifestyle assets in the ATO spotlight this tax time
- Business News
Thinking the ATO won’t look at your new car or mega boat this tax time? Think again.
The ATO has announced its extension of its “Lifestyle assets data-matching” program for the 2020-21 financial year through to 2022-23, meaning all assets over $65,000 purchased within the financial year could potentially be assessed as part of your tax claim.
The program uses collected policy information from 25 insurance providers to determine certain asset classes with the aim to identify “untruthful” income declarations on tax returns.
According to the ATO, this program seeks out the taxpayers who are buying assets for personal use through their business or subsequent entities and claiming the GST credits they are not entitled to.
Further, the ATO will use the data-matching to identify those who are exploiting these assets for personal use for their employees that puts into question the laws of the fringe benefits tax system.
It is estimated that approximately 300,000 records of individuals will be sourced this financial year, with the data collected aiming to “improve our (ATO) compliance risk profiling of taxpayers and provide a holistic view of their assets and accumulated wealth.”
Insurance policies will be acquired for the following asset classes where the value is “equal to or exceeds nominated thresholds”:
|Minimum Asset Value Threshold
|Motor Vehicles (including caravans)
|$100,000 per item
Dabble in cryptocurrencies? There are tax obligations the data-matching program will identify if you have acquired cryptocurrency as an investment. Selling, exchanging, gifting, trading, or using cryptocurrency to pay for any goods or services may entail a capital gains tax, depending on the nature and circumstances of the transaction.
Have a SMSF? The ATO is also using this program to identify SMSFs that are purchasing assets used to directly benefit the funds trustee or beneficiaries to ensure taxpayers are meeting their tax and super obligations.
The ATO will hold data collected from this program for five years.
New financial year sees changes to SMSF contributions
The start of the new financial year has come with changes to SMSF contributions, with the ATO announcing an increase from $25,000 to $27,500 on individual’s concessional super contribution (tax deductible amount).
Remember, if your SMSF balance is less than $500,000, individuals are also allowed to “roll-over” any unused caps from one year into the next, made more attractive by the fact that the non-concessional cap – or contributions made where you have not claimed a tax deduction – has increased by ten thousand dollars, to $110,000 per year.
2019-20 is the first financial year in which you can access any unused concessional contributions for roll-over into your SMSF.
Contact the Elevate Accounting team of specialists to learn more about your SMSF.