ATO receives five more years of policy details from insurers about ‘lifestyle assets’ like yachts, fine art
Article shared from the ATO
The Australian Taxation Office (ATO) today revealed it will be requesting a further five years’ worth of policy information from over 30 insurance companies about taxpayers who own marine vessels, thoroughbred horses, fine art, high value motor vehicles and aircraft.
Insurers have been asked to provide the ATO with policy details for “lifestyle assets” over certain asset value thresholds as part of the agency’s efforts to ensure taxpayers are fulfilling their tax and superannuation reporting obligations.
The ATO expects to receive information about assets owned by around 350,000 taxpayers from 2015–16 to 2019–20 as part of its data-matching program of work.
Information provided by insurers will be used by the ATO as part of compliance profiling activities.
Deputy Commissioner Deborah Jenkins said knowing who owns these lifestyle assets such as private jets and yachts helps the agency get a more complete picture about the actual financial situation of taxpayers as compared with what is reported on tax returns.
“If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a three million dollar yacht then this is likely to raise some red flags,” Ms Jenkins said.
“The ATO will be requesting a further five years’ worth of policy information from over 30 insurance companies about taxpayers who own marine vessels, thoroughbred horses, fine art, high-value motor vehicles and aircraft.”
“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.”
“Doing things like being untruthful about your income or failing to declare capital gains is effectively stealing from the community – and this is money the community is missing out on to pay for infrastructure and services we all rely on like schools, hospitals, and roads.”
Ms Jenkins clarified that the data will not be used to initiate automated compliance activity.
“Taxpayers selected for compliance activities are identified through other methodologies. The data is made available to our compliance teams to support their risk profiling of the selected taxpayers. Existence of an insurance policy may or may not prompt the compliance officer to pursue a particular line of enquiry”.
Aside from helping identify taxpayers who may be under-stating their income, the data from insurers may be used by the ATO to identify taxpayers who have made capital gains on the disposal of certain assets but who have not declared this to the ATO.
“With high value assets like fine art, there can be some significant capital gains made when these assets are sold, and capital gains tax may need to be paid on the sale or disposal of these items.”
The data will also be used by the ATO as part of their risk profiling activity to identify incorrect goods and services tax (GST) input tax credits where taxpayers are purchasing the assets for purely personal reasons and claiming GST credits as if the item was a business asset.
“If we discover incorrect GST input tax credit claims for items purchased for personal reasons, we’ll be following up and seeking full repayment on top of any applicable interest and penalties” Ms Jenkins said.
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.
Insurers will be required to provide the ATO with detailed policy information where the value of assets is equal to or exceeds the following thresholds:
“If a taxpayer is reporting a taxable income of $70,000 … but we know they own a three-million-dollar yacht, then this is likely to raise some red flags.”
- Marine vessels $100,000
- Motor vehicles $65,000
- Thoroughbred horses $65,000
- Fine art $100,000 per item
- Aircraft $150,000
The ATO’s lifestyle assets data-matching program has been in place since February 2016. Under the program, the ATO has already collected data on insurance policies for the 2013–14 and 2014–15 financial years.
Taxpayers who suspect they have failed to properly comply with their taxation or superannuation obligations are encouraged to speak to their tax professional or make a voluntary disclosure to the ATO. Taxpayers who make a voluntary disclosure can generally expect a reduction in the administrative penalties and interest charges that would normally apply.
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About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
The ATO now has enhanced visibility over high-value assets through insurance-policy data.
This means ownership of luxury or lifestyle assets is easier for the tax office to detect — even if not declared on returns.
Owning expensive assets without matching declared income can trigger scrutiny.
The “wealth vs income” mismatch (e.g. low declared income but high-value assets) may prompt risk-profiling or audits.
Declared income, capital gains, GST and FBT must align with actual asset ownership and use.
The data-matching program increases the likelihood that undeclared capital gains, improper GST credits or personal use of business/ SMSF assets will be detected.
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Frequently Asked Questions
What is the ATO’s “lifestyle assets” data-matching program?
It’s a scheme where the ATO collects insurance-policy data from insurers covering high-value “lifestyle assets” (boats, aircraft, fine art, luxury vehicles, etc.) to cross-check against taxpayers’ declared income, capital gains, and other tax reports.
Which assets are included under this program, and what are the value thresholds?
Assets monitored include marine vessels, high-value motor vehicles, fine art, aircraft, and thoroughbred horses. Thresholds include, for example, marine vessels over A$100,000, fine art over A$100,000 per item, vehicles over A$65,000, and aircraft over A$150,000.
What kind of data does the ATO get from insurers?
Insurers supply client identification (name, contact details), policy details (policy number, dates, insured value, purchase price), item descriptions (make/model, type of asset), and registration or identification info — enough for the ATO to link assets to taxpayers.
Why is the ATO collecting this data — what are they checking for?
The ATO uses the data to spot potential tax-compliance issues: undeclared income or capital gains, incorrect GST claims or inappropriate use of business assets for personal enjoyment (which might trigger fringe-benefits tax), or misuse of assets in self-managed super funds (SMSFs).
What should taxpayers do if they own high-value assets?
They should ensure their tax returns correctly reflect income, capital gains (if assets are sold), and appropriate GST/FBT declarations if assets are used for business or fund purposes — and maintain documentation proving legitimate use or disposal where applicable.
Why is the ATO collecting data on “lifestyle assets”?
The ATO is collecting insurance policy details on high-value “lifestyle assets” (like boats, fine art, luxury cars, aircraft, and thoroughbred horses) to help identify whether taxpayers are accurately reporting their income and tax obligations — especially where someone owns expensive assets but their declared income doesn’t match their lifestyle.
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