Post by Sapphire Capital on Aug 4, 2008 4:15:37 GMT 4
August 03, 2008
AUSTRALIA'S richest people are being targeted as the number of tax snoops watching their every move is about to be trebled.
Just 2½ months after Kevin Rudd announced his 33 per cent tax on luxury cars, the Prime Minister has the elite of the elite in his sights again.
The Australian Taxation Office is sending warnings to the nation's 1200 richest individuals – those with a personal wealth of more than $30 million – that there will be no mercy if they do not keep their financial affairs above board.
"We acknowledge the contribution which most wealthy people make to our economy and tax revenue," Commissioner for Taxation Michael D'Ascenzio writes.
But he goes on to warn the well-to-do of the consequences of if they fail to pay up.
"Over the next few years we will almost triple the number of officers dedicated to monitoring wealthy people.
"I suggest you review your tax affairs in consultation with your adviser and consider how the tax office is likely to view your approach."
KPMG tax specialist Andy Hutt said there was no doubt the taxman was cracking down on the well-to-do.
"They've expanded the scope of their high-net-worth review program," Mr Hutt said. "People who do have considerable wealth should be taking heed.
"In my experience, people are taking it seriously – they mean it this time."
Dr Michael Dirkis, of the Taxation Institute of Australia, said being rich was getting more expensive – with the taxman demanding ever-more-detailed information from the well-heeled.
"If you are above a certain $30 million in assets, there is a special schedule – or questionnaire – which is around 54 pages," Dr Dirkis said.
"They're virtually audited before they lodge.
"If you are getting a tax professional at this end of the market, they are probably charging between $700 and $1200 an hour – it doesn't take much to rack up a big bill."
Mr Hutt said top people's share option schemes and overseas assets were especially interesting to the taxman this year.
"The ATO is sending a strong signal it is going to look closely at them and it is going to be quite in-depth," he said.
"If you have employee share options or arrangements with tax havens, the questions are going to be very detailed."
source: James Campbell