RCR Finance Bulletin # 3 - Thursday, October 4, 2007

Property Investors on Tax Office Hitlist

Property investors are on the Australian Tax Office’s (ATO) radar for 2007-08, with the correct payment of capital gains tax (CGT) on property sales named as a top priority for the year ahead.

The ATO says it will closely monitor capital gains arising from the sale of property and shares, and will cross-reference data on millions of property transactions across the country to ensure investors are meeting their obligations.

The ATO is using data matching techniques to identify under-reporting of capital gains by obtaining information on asset transactions from state based Land Titles and Revenue offices, government departments, regulatory bodies, private-sector organisations, law enforcement agencies and financial institutions.

Essentially the message is becoming very clear - the ATO's capacity to identify tax evasion is becoming very sophisticated.

The ATO will be writing to people who appear to have made capital gains from property transactions, alerting them to their reporting obligations. It plans to examine approximately 6000 at-risk CGT cases this financial year, including taxpayers who made a gain from disposing of assets to invest in superannuation. The ATO will apparently this year also identity match over 220 million records.

If you own investment properties, and so as to ensure you cover all bases, it is recommended that you seek the advice of your accountant or Tax Agent to consider any potential tax implications in relation to buying, selling, or keeping property.

It's equally important that you contact us here at RCR Finance for an obligation free Finance Review to ensure your finance structure is correctly set before buying or selling (even if you merely just want a "Sanity Check" done).