Financial planners and property investors will need to pay closer attention to the Federal Government’s Capital Gains Tax regime, with an Australian National Audit Office (ANAO) report suggesting the Australian Taxation Office (ATO) work more closely with State and Territory Government agencies and increase the disclosure requirements within personal tax returns.
The ANAO report on CGT compliance released late last month reviewed progress being made by the ATO on a four-year CGT project started in mid-2004 and, while acknowledging the risk management framework implemented by the ATO and the need to balance administrative costs, recommended further action.
“The ANAO considers that in the absence of other information sources, the ATO’s understanding of CGT compliance risks would be enhanced by increasing the disclosure requirements for asset disposals reported by individual taxpayers in their income tax returns,” the report said.
“The current lack of key identifiers for external real property data also significantly reduces the proportion of individuals, who have disposed of real property, that can by readily identified and risk assessed for compliance by the ATO,” the ANAO said.
The report said that, additionally, there had been delays in the ATO acquiring external data — something which had resulted in it not being in a position to effectively measure levels of CGT compliance across the total taxpayer population.
The ATO accepted all seven recommendations flowing from the ANAO report.
