ATO zeroes in on SMSF lifestyle assets

The Tax Office has now extended its lifestyle assets data-matching program for the 2020–21 financial year through to 2022–23, allowing it to acquire insurance policy information for certain asset classes.

Motor vehicles with values of $65,000 and above will fall within the ATO’s data collection scope, as well as marine vessels above $100,000, thoroughbred horses over $65,000, fine art over $100,000 per item, and aircraft over $150,000.

The ATO will acquire the data from 25 insurance providers, with the agency expecting 300,000 individuals to be identified each year.

The data-matching program, which has been around since 2016, will give the ATO oversight over individuals who have been untruthfully declaring insufficient income in their tax returns despite accumulating assets.

Taxpayers who dispose of assets and do not declare the revenue and capital gains on those disposals will also be identified.

According to the ATO, it will also help identify taxpayers who are purchasing assets for personal use through their business or related entities and claiming GST credits they are not entitled to, or those who are using those assets for the personal enjoyment of an associate or employee which may give rise to a fringe benefits tax liability.

The program will also be used to identify SMSFs that may be acquiring assets but applying them to the benefit of the fund’s trustee or beneficiaries.

Where an individual has been identified for not complying with their tax obligations, the ATO said it will apply “appropriate treatment recommendations”, but noted that it will not result in the “automated generation of compliance activities”.

“Where a taxpayer is correctly meeting their obligations, the use of the data will reduce the likelihood of contact from us,” said the ATO.

“In cases where taxpayers fail to comply with these obligations even after being prompted and reminded of them, escalation for prosecution action may be initiated.”

Data collected by the ATO will be retained for five years.  

The extension of the lifestyle assets data-matching program comes as the ATO increasingly relies on similar programs — including its work on motor vehicles and cryptocurrency — to ensure taxpayers are meeting their tax and super obligations.

Jotham Lian
20 July 2021
smsfadviser.com