The ATO has recently announced they’ll be cracking down on ‘Lifestyle Assets’ from 2020-21 to 2022-23. They’ll be undertaking data-matching with insurance agencies, and expect to obtain the records of around 300,000 Australians a year.
Wait – what’s a lifestyle asset?
According to the ATO, it includes marine vessels, motor vehicles, aircraft, thoroughbred horses and fine art. They’ll be looking for anything that’s worth over a certain threshold, which we’ll talk more about below.
While not everyone is buying racehorses and Picassos, it’s far from uncommon to buy a new car or a boat.
But if you purchase any of these assets without properly checking compliance, you could easily find yourself dealing with the pointy end of an ATO probe. That’s not where you want to be.
If it floats, flies, drives or rides – speak to us before you buy it!
The logic behind this crackdown is that ATO Data Matching will help to single out those seemingly living beyond their means, or those who may be using business funds for personal gain.
Now, we know that none of our clients are engaging in this sort of behaviour.
But even so, you should always contact your advisor before purchasing a lifestyle asset. We’re experts when it comes to tax compliance, and we can make sure that everything is covered if the ATO decides to come knocking.
Even if you know you’re not doing anything wrong, dealing with ATO scrutiny can be frustrating, time-consuming and above all, anxiety-inducing. Because of the way they do things, you can quickly find yourself caught up in a web of nonsensical bureaucracy that takes a long, long time to untangle.
You can avoid all of that. As long as you always talk to your advisor before you purchase any lifestyle assets. We’ll make sure that the purchase is completely tax compliant. We want you to be able to kick back on your new fishing boat with your family – without having to flinch every time the phone rings.
Below are the value thresholds for the different types of lifestyle assets. If your purchase is above this threshold, you need to talk to us before you buy it.
|Asset class||Minimum asset value threshold|
|Motor vehicles including caravans||$65,000|
|Fine art||$100,000 per item|
Thinking about making a big purchase? Talk to your financial advisor before you do. It can save you a world of trouble down the track.
Disclaimer: This advice is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether this advice is suitable for you and your personal circumstances before acting on it.