ATO to launch ‘Share Transaction data’ matching project
The ATO will be launching a share market transaction capital gains project that is aimed at improving the ATO’s compliance capability in relation to the identification of capital gains resulting from the disposal of shares.
The ATO will collect share holding data from nominated source organisations and will look to match the data maintained by these organisations with that held by the ATO. This will be an ongoing project, with the data being requested from these organisations every 6 months.
Which organisations will be affected?
The following organisations holding share transaction data will be requested to provide share holding data:
- Computershare Limited
- Australian Securities Exchange Limited
- Link Market Services Limited
- Advanced Share Registry Services Pty Ltd
- Security Transfer Registrars Pty Ltd.
These organisations will be asked to provide certain information for each share transaction (some of which may go back to 20 September 1985) including:
- Full name and address of holder
- Holder identity number
- Shareholder registry number
- Entity name and ASX code
- Purchase date and price
- Sale date and price
- Quantity of shares acquired and disposed of
- Corporate actions affecting shareholders (e.g. corporate restructures)
- Where available, tax file numbers.
What will happen to the collected data?
The data collected will be income matched. That is, the data will be used to check whether the taxpayer has correctly declared the sale/disposal in their income tax return along with meeting other tax obligations such as lodgement compliance.
Taxpayers identified as potentially not complying with their capital gains tax obligations will be referred to the relevant compliance area of the ATO for appropriate follow up action. This will initially be in the form of a letter that will be accompanied by a capital gains tax schedule prepared by the ATO that sets out the details of the relevant disposal. Taxpayers will be asked to review this schedule for correctness.
Essentially, the letter will allow for a 28 day response time, after which the ATO will issue a notice of amended assessment unless the taxpayer has contacted the ATO before this time to dispute the amount, in which case the taxpayer will most likely be asked to provide further supporting information.
Under this project, the ATO has indicated that where they write to a taxpayer and subsequently make an adjustment to the taxpayer's return, there will be no penalty for those relevant years. However, interest will apply to the outstanding tax if the amended amount is not paid by the due date. Should the taxpayer not include all its income in future returns, then a penalty will be considered.