-
ATO targeting mischaracterised lifestyle assets and private pursuits
Posted on January 11th, 2018 No commentsThe Australian Tax Office (ATO) is targeting privately owned and wealthy groups that display specific behaviours and characteristics in relation to their tax affairs and lifestyle.
A large focus is currently on lifestyle assets and private pursuits that generate deductions or are mischaracterised as business activities. The ATO is also looking at those assets and pursuits which are incorrectly accounted for in terms of Division 7A or Fringe Benefits Tax (FBT).
Activities that attract the Tax Office’s attention include:
– private aircraft ownership or activities
– art ownership and dealings
– car or motorbike racing activities
– luxury and charter boat activities
– enthusiast or luxury motor vehicles
– grape growing and other farming pursuits
– horse breeding, racing and training activities
– holiday homes and luxury accommodation provision
– sporting clubs and other activities involving the participation of principals or associates of principals of private groups.The ATO is addressing the following tax risks:
Income tax
– Entities claiming deductions from ownership lifestyle assets or private pursuits against other income derived by the entity but not carrying on a business.
– Individuals disposing of assets and not declaring the revenue or capital gains on those disposals.
– Entities incorrectly apportioning deductions where assets have been used privately or periods not available for rent or hire.
– Division 7A – individuals purchasing assets through their business entities but applying assets to the personal enjoyment of a shareholder or associate of a private company giving rise to a deemed dividend.FBT
– Individuals purchasing assets through their business entities but applying those assets to the personal enjoyment of an employee or associate giving rise to a FBT liability.GST
– The purchasing of assets or expenditures concerning private pursuits for personal use through their business or related entities and claiming input tax credits they are not entitled to claim.Superannuation
– SMSF’s acquiring assets but applying them to the benefit of the fund’s trustee or beneficiaries.Uncategorized
- Answer our questions for your personalised Action Plan
- Client resources
- Complete your free Financial Health Check today!
- Privacy Policy
- TRUST login page
- Subscribe
- Welcome
- Finding sellers and buyers
- Applying for a loan
- Writing a business plan
- Evaluating the Business
- What we do
- The business plan
- Raising money
- Why choose us?
- Budgeting template
- Building a brand
- Presenting to the investor
- Good employee relations
- Pricing Strategies
- How to get your loan approved
- Legal formalities
- Setting up shop
- Loan checklist
- ‘Insuring’ your bright future
- Managing your money
- Sample business plan
- Growing your business
- Business news
- Firm news
- Business calendar
- Developing your business
- Financial management
- Latest News
- Useful links
- Client Log In
- Contact us
- Disclaimer
- Advantages of borrowing
- Types of loans
- Security
- The loan agreement
- The loan proposal
- Loan application
- Benchmarking
- Improving your business plan
- Better financial control
- Clever marketing strategies
- Cash Flow Projections
- Avoiding bad debts
- Better financial control
- Avoiding the Cash Flow Crunch
- Receivables & payables
- Inventory financing
- Trimming Overhead Costs
- Getting started
- Doing your research
- Making the decision
- Financing the purchase
- Pricing the company
- Negotiation
- Making and evaluating offers
- Closing the transaction
- New customers
- New orders
- Credit period
- Collection policy
- Setting a goal
- Personal life cycle
- Where to begin
- Putting it all together
- Work your plan
- Retirement
- Staying on track
- Setting goals
- Before you begin
- A word about tax
- Business life cycle
- Putting it all together
- Planning for retirement
- Exiting your business
- Starting with a dream
- Planning for profit
- Time for expansion
- Preparing for exit
- At last – retirement!
- The business hierarchy
- Business plan
- Financial plan
- Personal problems
- Conflict resolution
- Choosing a successor
- Planning for the future
- What is a Budget?
- The Budget Equation
- Constructing your budget
- Your retirement income