ATO on the hunt for personal asset details, data
Today I issue a danger alert to all those owning fine art, marine vessels, thoroughbred horses, caravans and motor homes, moderately expensive motor vehicles and aircraft.
ROBERT GOTTLIEBSEN@BGottliebsen
September 19, 2024
Today I issue a danger alert to all those owning fine art, marine vessels, thoroughbred horses, caravans and motor homes, moderately expensive motor vehicles and aircraft.
The Australian Taxation Office has written to most major insurance brokers demanding details of their customers’ ownership of these assets.
Some insurance brokers, in informing their clients of the ATO demand, have relayed “soothing” words from the ATO (see below), but asset owners should have no doubt the ATO is preparing for an attack.
If the attack uncovers tax evaders and organised criminals, including drug dealers then it is a great event.
But, this action by the ATO raises serious issues and is being undertaken when it still has powers to misuse the information. And it is likely they will exercise those powers.
Knowledge of the ATO action hit my desk on the same day as we saw the incredible advances in technology which led to portable phone explosions, which will make data even less secure — particularly government data.
Currently ATO data holds records of income, expenses, addresses et cetera. But, now the ATO will have record of the money value and likely location of physical assets outside the family home.
The ATO assured insurance brokers the data will be kept safe, but in today’s world no data is safe, particularly data which is incredibly valuable to the criminal world.
And today’s organised criminals have no regard for the safety of the residents in the households they raid.
The very least the ATO should have done was to work with insurance brokers to minimise the data’s value to hackers and criminals.
Private groups around the world are realising — while doing everything possible to safeguard data — the danger, minimising the personal data on file. The ATO heads in the reverse direction.
The Australian Taxation Office is recognised as a world leader in trying to stop international companies from rorting the system, but, despite these efforts, the government will need to change the tax rules to get international companies to pay proper tax.
In the individual and family business arena, Australia has some of the most unfair tax rules in the world, which makes this asset disclosure a very dangerous weapon.
The ATO is already behaving very badly in “fishing” investigations of small and medium sized enterprises which pay their tax. The cost impost on those enterprises is enormous.
When the tax office issues an assessment it becomes an immediate liability and people facing this often fictitious liability have to prove their innocence, usually with no knowledge as to how the fictitious amount was calculated. Again, it’s a high cost exercise.
The ATO rarely uses this power against large corporations who can defend themselves.
The robodebt scandal was a good illustration because it was created by the use of flawed taxation data and ATO prosecution methods, although the ATO itself did not undertake the exercise.
The government should never have allowed this new ATO thrust until proper taxations safeguards were put in place.
I again emphasise that used with proper rules this can be a valuable tool against organised crime and the proceeds of drug distribution, as well as conventional tax avoiders.
I will now quote extracts from a letter to clients by one broker which I have agreed not to name.
Broker: “The notice requires us to provide the ATO with policy holder data for certain insurance policies that were active anytime during the period from July 1 2023 to June 30 2024 covering the following asset classes and value thresholds: Caravans and motor homes ($65,000); motor vehicles ($65,000); thoroughbred horses ($65,000); marine vessels ($100,000); fine art ($100,000 per item), and; aircraft ($150,000).
“The notice also requires provision of the following information to the ATO in respect of those insurance policies covering the above mentioned assets classes and value thresholds: Given name and surname(s); date of birth(s); addresses (residential, postal, other); Australian business number if applicable; email address and contact phone number”.
I would add using only a tax file number and/or business number would provide all the information the ATO needs and would help in data security.
The ATO also wants policy details on each asset, including: its start and end dates; policy cost; total value insured; the purchase price of the property insured; registration number or identification number of the property; a description, including year make and model of vehicles and marine vessels; primary use type and finance or other conditions.
The broker issues these words of comfort: “The ATO has informed us that the data may be used by the ATO in compliance profiling activities to help identify possible compliance issues involving income tax, capital gains tax, fringe benefits tax, GST and superannuation.
“The ATO will not use the data to directly initiate compliance activities but to assist with risk profiling and the identification of cases which present a higher risk.”
Frankly, this is ATO gobbledygook. They will use the data in every way possible — which is why they want so much detail.
The broker also sets out a why the demand is legal and why the broker has no choice but to provide the required information.
The ATO gives the information demand the title “Lifestyle assets data matching program”.
The late George Orwell, author of Animal Farm and 1984 would have been full of admiration for the title, and may have even been a little upset that he didn’t think of it first.
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ATO in market for office space in Adelaide in potential move from Franklin St HQ
The ATO is considering its future at one of Adelaide’s largest CBD towers, as it slashes its office accommodation requirements
In a request for proposal issued to the market last month, the tax office announced it was on the hunt for 19,000sq m of office space in Adelaide’s CBD, to accommodate 2000 staff, well down on the 33,000sq m it currently leases on Franklin St.
City landlords and developers have until October 3 to pitch their offerings to the ATO in what will be one of the largest office leasing deals in Adelaide in recent years.
According to documents detailing the new office requirement, the ATO is looking to enter a 10 or 15-year lease for 19,000sq m, starting in November 2026, or August 2027 if an integrated fit-out is proposed.
Funds house Charter Hall will be hoping to retain the ATO at its current home in Adelaide’s City Central precinct, which it has occupied since the tower was built in 2012.
But upgrades may be needed given the tower – jointly owned by Charter Hall’s Direct Office Fund and its ASX-listed Long WALE REIT – does not currently meet sustainability standards set by the federal government’s Net Zero in Government Operations Strategy.
From July 2025, larger federal government leases can only be entered for buildings that have at least 5.5-star NABERS base building and energy ratings.
The threshold increases to 6 stars for newly built offices seeking a federal tenant from July 2026.
Walker Corporation is expected to make a play for the ATO at its second tower proposed for the Festival Plaza precinct, while Kyren Group’s 21,000sq m development on Franklin St – currently under construction 100m west of the ATO’s current home – could also be in the mix should the ATO decide to relocate.
An ATO spokesman said most of its employees preferred a blend of working in the office and at home, and accommodation that supported flexible working arrangements would be required.
“Accommodation decisions are made to support the ATO now and into the future, while optimising value for money and the use of space,” he said.
“The ATO is committed to helping our employees achieve work-life balance. Working flexibly can support retention, attendance, productivity and engagement.”
The battle for the ATO lease follows a wave of new developments in Adelaide, which pushed the city’s vacancy rate to its highest level since the mid-1990s earlier this year.
According to the latest Property Council figures, the CBD vacancy rate eased slightly to 17.5 per cent in July, down from a national high of 19.3 per cent in January.
Adelaide has the highest rate of vacancies outside Melbourne.
The ATO is currently the major tenant in the 37,000sq m Franklin Street building, but sub-leases a component to other federal agencies.
It was previously Adelaide’s largest office building by floor area, before completion of Charter Hall’s 60 King William St project and Walker Corporation’s first tower at Festival Plaza – One Festival Tower – last year, which both offer close to 40,000sq m of office space.
In considering a potential move in Adelaide, the ATO has underlined a preference to be the only office occupant in a new development, with minimum floor-plates of 1200sq m.
Electric vehicle charging infrastructure is also required, along with 40 car parks.
The ATO has engaged Colliers to manage its new leasing requirement in Adelaide.
Charter Hall is the main landlord in Adelaide’s City Central precinct – an area west of King William St bounded by Waymouth, Franklin and Bentham streets.
GPO Exchange tower – home to BHP – is held in Charter Hall’s Prime Office Fund, while its Direct PFA Fund only recently sold out of the precinct’s EY building in a $84.25m deal to Kyren Group’s Theo Samaras.
The precinct welcomed a new Marriott Hotel last month – the last high rise to complete a 20-year development of the 1.7ha City Central site.