Since early 2016 we have regularly updated the racing industry about the ATO’s “Lifestyle Assets” data matching project it initiated at that time.
The ATO warned Accountants that they intend to request information from insurance providers in relation to capturing the ownership of ‘lifestyle’ assets including boats, planes, cars and, not surprisingly, racehorses.
In an update media release issued in the past few weeks, the ATO have made it clear that this project is still very much on foot and accessing and retaining data has become a significant priority for them.
ATO wants longer to “retain” data
The data that the ATO gathers will not be used to directly initiate compliance activity, but it will be made available to designated ATO officers to assist in their profiling of taxpayers selected for audit and review activities. The existence of an insurance policy for a racehorse may prompt the ATO officer to “pursue a particular line of enquiry”.
Under the original project protocol, the ATO could only retain data, relating to the years in question, i.e. the 2014 and 2015 financial years, for a maximum period of three years. Beyond this three-year period, the data was to be destroyed.
It obviously became apparent to the ATO that destroying data after only three years would hinder the objectives of this program, thus their latest release advised that it was seeking an extension from the relevant Federal authority to retain the data for five years, amongst their reasons being:
- Destroying data sooner would inhibit their ability to form a “holistic” view of a taxpayer’s position asset position;
- The data is being collected and collated incrementally;
- An asset profile of taxpayers will be enhanced as more data becomes available;
- Destruction of the data would inhibit the ATO’s ability to identify taxpayers who may be subject to administrative action and therefore result in loss of public revenue; and
- An extension of the retention period will not affect the seriousness of the administrative action that may flow from the match but will assist in detecting non-compliance or taxation fraud.
The above indicates just how seriously the ATO is taking this project. The Federal authority has since come back to them advising that their extension to retain data for up to five years was successful and, in the words of the ATO, in the “public interest”.
Insurance records gathered will be electronically matched with ATO data holdings to identify non-compliance with registration, lodgement, reporting and payment obligations under taxation laws.
I again emphasise that this data matching project serves as a warning for racehorse owners that they must get their tax affairs in order, the objectives of this project being:
- Assist with profiling taxpayers, providing ATO compliance staff with a holistic view of a taxpayer’s wealth;
- Identify possible compliance issues with income tax, capital gains tax, fringe benefits tax, GST and superannuation obligations;
- Identify avenues available to assist in debt management activities;
- Promote voluntary compliance and strengthen community confidence in the integrity of the taxation and superannuation systems; and
- Ensure compliance with registration, lodgement, correct reporting and payment of taxation and superannuation obligations.
What insurance data does the ATO want?
Per the latest ATO release, this has not changed.
Data will be sought from the above insurers for racehorses insured for greater than $65,000.
In relation to individual racehorse owners, the ATO will be seeking:
- Given and surname(s) (if more than one name on the policy)
- Date of birth(s)
- Addresses (residential, postal, other)
- Australian business number (if applicable)
- Email address
- Telephone numbers
For non-individuals (e.g. companies or trusts), the ATO will be seeking:
- Legal and trading names
- Addresses (business, postal, registered, other)
- Australian business number and/or Australian company number
- Contact name
- Contact phone
- Contact email address
- Policy number
- Policy inception date
- State date of current policy
- End date of current policy
- Total value insured
- Purchase price of the property insured
- Registration number or identification number of the property
- Insurance category
- Description of the property insured
- Physical location of the property
Number of records
As we indicated in our previous release, the ATO anticipate obtaining records of more than 100,000 policies, many of which will be held by individuals.
Please contact me if you wish for me to clarify or expand on any of the matters raised in this article.
Any reader intending to apply the information in this article to practical circumstances should independently verify their interpretation and the information’s applicability to their particular circumstances with an accountant specialising in this area.
End of release.
Paul Carrazzo CA
Carrazzo Consulting Pty Ltd
801 Glenferrie Road, Hawthorn, VIC, 3122
TEL: (03) 9982 1000
FAX: (03) 9329 8355
MOB: 0417 549 347
Web Site: www.carrazzo.com.au