High-net-wealth clients have been placed on alert as the ATO seeks to extend the period it can retain data from insurance policies on certain asset classes, including race horses, fine art and aircraft.
ATO wants to hold on to lifestyle assets data for longer
In 2016, the Tax Office was granted exemption by the Office of the Australian Information Commissioner (OAIC) to retain data from insurance providers on policies for certain classes of assets — including marine vessels, enthusiast motor vehicles, thoroughbred races horse, fine art and aircraft — for a period of three years.
It has now sought to increase the retention of that data for a further two years with the OAIC, taking the total retention period to five years from receipt of information.
The ATO argues that destroying the data sooner “would inhibit our ability to form a holistic view of a taxpayer’s asset position” and that “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”.
The lifestyle assets data matching program saw the Tax Office collect information from 28 insurers for the 2013–14 and 2014–15 financial years, with the agency anticipating records of more than 100,000 policies.
Marine vessels over the values of $100,000, enthusiast motor vehicles over $50,000, thoroughbred horses over $65,000, fine art over $100,000 per item, and aircraft over $150,000 all fall within the ATO’s data collection scope.
While the ATO said the data will not be used directly to initiate compliance activity, it “will be made available to compliance staff to assist in their profiling of taxpayers selected for audit and review activities through other methodologies”.
According to the ATO, the program will allow it to profile taxpayers, identify compliance issues with income tax, CGT, FBT, GST and superannuation obligations, and promote voluntary compliance.