Tax Office trawls for owners of boats, planes, horses

The Australian Taxation Office has launched a data matching program where it will contact insurance providers to identify wealthy policy owners of assets such as boats. Photo: Janie Barrett The ATO expects to receive 100,000 records on asset classes including including thoroughbred horses. Photo: Rohan Thomson

Private jets are a play thing for the rich. Photo: Louie Douvis

The Tax Office is looking closer into the tax affairs of rich people who may have bought expensive boats, planes, cars, art and thoroughbred horses.

It has launched a data-matching program where it will contact insurers to identify policy owners of various classes of insured assets that are often associated with wealth.

The agency expects to receive 100,000 records on asset classes including including “marine, aviation, enthusiast motor vehicles, fine art and thoroughbred horses”.

It will allow the ATO to make more accurate estimate of peoples’ wealth to ensure they meet their tax obligations.

“We have recently given tax agents advance notice of plans to expand our data-matching activities to enhance profiling especially of the wealthy,” an ATO spokeswoman told Fairfax Media.

“It is expected that the ATO will issue notices next month to insurance providers seeking details.”

The Tax Office defines “wealthy individuals” those who, together with their business associates, control net wealth of $5 million or more.

“We use sophisticated data-matching and analytic models, drawing on tax returns and referrals from other government agencies or the community, to identify wealthy individuals and link them to associated businesses,” the ATO said on its website.

Tax adviser to many of Melbourne’s wealthy, Marin Accountants founder Bernard Marin, said: “This is just another example of the ATO’s enthusiasm to ensure nothing falls through the cracks.”

“It wants to ensure that rich get caught up in the loop,” he said.

“Property and shares are assets that are hard to hide. But people often buy art and hang it in their walls, and often don’t include it as part of their assets, when it is subject to tax. These are lifestyle assets that are subject to capital gains tax (CGT).”

Over the past few years the ATO has sent letters to very wealthy people asking for further information before deciding whether to conduct a review or audit.

In 2014-15 it went after 9400 privately owned and wealthy groups raising more than $2.1 billion in liabilities and nearly $1 billion in cash collections.

But it also settled with a number of high-wealth taxpayers that year. ATO settlements data showed that after disputes, it settled on $140 million in revenue with 78 high-wealth individuals.

The agency was criticised for allowing wealthy tax cheats to get away without usual penalties under a “last-chance” amnesty offered in 2014 to people with hidden assets and income stashed overseas.

Dubbed Project Do It, the amnesty capped penalties to four years and those making voluntary disclosures were given an assurance that they would not be investigated or referred for criminal investigation.

The ATO has so far raised only $127 million in tax collections as a result of the amnesty, but it expects this number to increase.

As of June 30 the Tax Office had received more than 5800 disclosures as part of the amnesty, resulting in more than $5 billion in assets declared and more than $600 million of omitted income disclosed.

Initially taxpayers that were caught up in official ATO audits were prohibited from participating in the amnesty, but then the ATO allowed those with audits that were unrelated to their offshore assets/income to take part.

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