ATO, Superannuation

SMSF collectables under scrutiny

ATO SMSFs collectables

The ATO will use its data matching powers to check if SMSFs are using high value assets and collectables for personal use in breach of the law.

The ATO will use an ongoing data matching project to ensure SMSFs that have acquired lifestyle assets and collectables are not using them for personal enjoyment.

The regulator indicated the exercise will be used to specifically examining the ownership and use of high value motor vehicles, marine vessels and fine art.

The announcement was made as part of wider comments released on the ATO website that the data matching project would be requesting five years of insurance policy information from more than 30 insurance companies.

Alongside identifying misuse of an asset within an SMSF the data will be used to identify people who may have understated their income, not reported capital gains on the disposal of an asset or have claimed goods and services tax input tax credits on the asset when they are not applicable if used privately.

The ATO stated it expected to receive information about assets owned by around 350,000 taxpayers from 2015/16 to 2019/20 which would be used as part of its compliance profiling activities but will not be used to initiate automated compliance activity.

ATO deputy commissioner Deborah Jenkins said having information around the ownership of the high value assets will assist the regulator in forming a view on the actual financial situation of these taxpayers compared to what is reported on their tax returns.

“If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a $3 million yacht then this is likely to raise some red flags,” Jenkins said.

“Regardless of your level of wealth, we all need to pay the correct amount of tax, and this data will allow us to ensure those people who can afford these kinds of items are doing the right thing, along with everyone else.”

“Self-managed superannuation funds that the ATO suspects may be acquiring lifestyle assets purely for personal enjoyment of the fund’s trustee or beneficiaries are also likely to be looked at by the ATO.”

The regulator stated the value of the assets under consideration would be equal to or exceed certain thresholds set at $100,000 for marine vessels, $65,000 for motor vehicles, $100,000 for fine art, $65,000 for thoroughbred horses and $150,000 for aircraft.

The ATO’s lifestyle assets data-matching program has been in operation since early 2016 and has already collected data on insurance policies for the 2013–14 and 2014–15 financial years.

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