New Extensive ATO Data matching program

Found a link to this on another forum.

If you have been hiding from paying CGT or other property taxes you should be worried because the ATO has requested 32 years worth of data from various govt agencies.

Notice of Data Matching Program - Real Property Transactions
Gazette - C2015G02019
Notice of Data Matching Program - Real Property Transactions

 

Here is an article about it
Foreign buyer crackdown: ATO demands 32 years' worth of property records

 

How many years can ATO go back? Is it just 2 years??

 

no limit for fraud.

 

Can they ask me to provide evidence for PPOR even after 7 years?

 

I think the banks keep 7 years worth of transactions in downloadable statements. With everything moving to digital format, I would think 7 years worth of transactions is the requirement, but I am not sure if we are supposed to keep copies ourselves past that?

 

Hmmm....This is not just political now. They are getting serious.

Foreign buyer crackdown: ATO demands 32 years' worth of property records

 

How is it possible to hide these things from the ATO?Not Paying CGT?

 

Plenty of people just don't pay tax. Some may sell and just take the money overseas. ATO would then have to first find out they haven't paid tax, then send them notices and then chase them in a foreign jurisdiction

 

The problem would always be with the data. Matching the property details and the names back to the TFN. Some land registries don't capture dates of birth which would lower the matching rates significantly, I would think.

 

yes. but you are only required to keep evidence for 7 years generally.

 

Naughty people.

 

When are you suppose to pay CGT? not necessarily at the time of selling the property or the time lodge your tax return? right?
My friend sold her first PPOR (was PPOR for 7 yrs, then turned to an IP for 5 yrs), during the same time they bought 2nd home and used it as their new PPOR, they are pretty much treating the 2nd one as their PPOR, so the 1st ppty was liable for CGT, and it was sold in 2013, however their accountant told them that they don't need to pay it now, it can be delayed.....

both my friend and myself don't understand, aren't you suppose to pay CGT when you lodge your return following the sale of the 1st property, why it can be delayed (accountant said it's definitely legal to do so), I guess you can make a decision as to which ppty is treated PPOR (no CG) as they've lived in both of them. but I still don't understand when exactly are we suppose to pay for the CG when we already determine that the 1st ppty was the IP?? how long can you delay CG?

 

CGT must be declared in the tax return in the year of sale of the property. It must then be paid when the ATO sent a notice of assessment. For some delaying issues see https://propertychat.com.au/community/threads/tax-tip-32-delay-paying-cgt-and-save-interest.3400/

 

Yes it is very common. I know of one who has been receiving tax free rental income for over 15 years, rented out via an agency but the ATO hasn't got a clue. Would matching rental bond data be likely to catch these scenarios where the non resident owner never files a tax return ?

 

Possibly. The ATO would then know the property is rented. Could then check who the owner is and then try to match the vague person on the title with an individual tax payer to see if they are lodging a return and declaring rental income.

 

They have a lot of data now to match with, if there was a mortgage on the property they probably have the TFN as well.

In the next couple of years I'd think that the ATO is going to catch a good 95% of these types of transactions because it is a genuine target of theirs'.

I can only assume that the accountant has decided to count the 1st property as the PPoR for the entire period (using the 6 year rule) and by delay they mean that you're going to pay the capital gains on the new property which obviously couldn't become the PPoR from a tax perspective until the disposal of the first one.

It's probably a terminology disconnect where they're using the term delayed when they really mean they're transferring the CGT exposure onto the new property and will worry about it when it comes time to sell that one.

Alternatively, they're dodgy as all hell, which unfortunately is pretty common as well.

 

I have recently seen two taxpayers who were sent letters explaining that the ATO had detected undeclared income from sale of property. From transactions over 4 years ago. Their view is that its either 100% exempt - In which case provide information to support that view OR the taxpayer has avoided income tax and that evasion is suspected. They warn they plan to issue a default assessment notice.

They give you a month to reply or they propose to issue a default assessment. They provide the numbers they base the default on. They even allow for duty and legals. And they propose to add 75% tax on top !!! And interest. The greater problem with a default assessment is it put the onus on the taxpayer to reply within the 30 days or its game over !! Its hard to appeal or object to a default assessment. Time is critical.

I expect there will be a lot of this stuff coming. And if records indicate it may be rented (there are ways that expose it !!) then they may even issue a default assessment with rental income of say 5% and no deductions. I havent seen one of those YET.

 

So what is the way to avoid this (and possibly a criminal offence under the Crimes Act) ??

Voluntary disclosure prior to the ATO detecting evasion, fraud or errors is generally well received and may avoid all or substantially reduce penalties. Personal legal / tax advice is recommended before actually approaching the ATO.

 

There is ultimately two ways to increase tax revenue...

1) Increase Taxes
2) Ensure that the taxes that should be paid, are being paid.

Edit: Kinda simple analogy, but based on the media reports of late, you would be forgiven for thinking that the government has been primarily focused on the first one only for some time...