The ATO has announced it is embarking on the following three (major) data matching programs.
Share transactions data matching program
Editor: The share transactions data matching program has been conducted since 2006 to ensure compliance with taxation obligations on the disposal of shares and similar securities. The collection of transaction history data dating back to 20 September 1985 (the introduction of the CGT regime) is used to enable cost base and capital proceeds calculations.
The ATO will continue to acquire details of around 61 million share transactions (in relation to 3.3 million individuals) for the period 20 September 1985 to 30 June 2018 from various sources, including share registries (such as Link Market Services, Computershare, Advanced Share Registry Services, and Automic Registry Services), and the Australian Securities Exchange Limited.
Credit and debit card data matching program
The ATO will continue to annually acquire data relating to credit and debit card payments to merchants, in this case acquiring data for the 2015/16 and 2016/17 financial years from the big four banks, as well as other banks (such as the Bank of Queensland and the Bendigo and Adelaide Bank) and others involved with credit and debit card payments (including American Express, First Data Merchant Solutions, Diners Club Australia and Tyro Payments Limited).
It is estimated that around 950,000 records will be obtained, including 90,000 matched to individuals.
Online selling data matching program
The ATO will continue to acquire online selling data, with an estimated 20,000 to 30,000 records obtained relating to registrants who sold goods and services to an annual value of $12,000 or more during the 2016, 2017 and 2018 financial years, from eBay Australia and New Zealand Pty Ltd (which owns and operates www.ebay.com.au). It is estimated that around half of the matched accounts will relate to individuals.
The ATO has released a taxation determination regarding how it will apply the nonarm’s length income (‘NALI’) rules to income generated from assets purchased by an SMSF using a related party ‘limited recourse borrowing arrangement’ (or ‘LRBA’).
The AAT has held that GST applied to the disposal of four properties that had been built, leased and then sold.
Editor: GST does not ordinarily apply to sale of residential premises unless they are ‘new residential premises’. However, there is a special rule in the GST law that states that a newly constructed property will not be ‘new residential premises’ if it has been applied only to receive residential rent (i.e., leased out) for at least a five year period.
In this case, the taxpayer had acquired four properties between November 2003 and August 2007, then built residential dwellings on them and, once completed, the dwellings were leased, and then sold between January 2011 and August 2012.
The AAT agreed with the ATO that the sales of the four properties in question should be treated as sales of new residential premises.
In particular, some of the dwellings had been simultaneously marketed for sale whilst being leased. Also, there were periods of time where the dwellings were without a tenant.
Due to the combination of these factors, none of the dwellings were used only for making input taxed supplies (of residential rent) for a five year period. Therefore, when disposed of, they should have been treated as taxable supplies and subject to GST.
The AAT also held that the ‘margin scheme’ could not be applied to reduce the GST payable, as the taxpayer was not able to provide any written evidence of an agreement between her and the purchasers to apply the margin scheme, as required by the GST Act.
Included in this edition of our newsletter:
1. Pre-retirees: Avoid ‘too good to be true’ tax schemes
2. ATO assistance with the pending $500,000 lifetime super cap
3. Deductibility of gifts provided to clients
4. Deductibility of airport lounge memberships
5. Phoenix Taskforce swoops on dodgy businesses
6. ATO exposes dodgy deductions