Adrian Abbott, of Sydney Tax Advisory, and Gregory Ross, of Eakin McCaffery Cox, discuss the ATO’s just announced focus on Sharing Economy Accommodation income through a 2016-17 to 2019-20 financial years data-matching program protocol.
Online Share Accommodation:
So you thought the Commissioner wasn’t watching
The ATO has just announced a new data-matching program for sharing economy accommodation for the 2017 and subsequent years.
The notice for the data matching was under Gazette – C2018G00634 and addresses “Online accommodation platforms enable members of the public to book and pay for accommodation services”.
The ATO wants to use its powers to tap into those platforms, so that they can identify taxpayers providing accommodation, usually through the renting of part or all of their residence.
It may have been assumed that the Airbnb type sharing accommodation platforms would remain under the radar safe from the gaze of the ATO. But not so.
To share accommodation, you need to access an online platform. That online platform keeps details of the owner and the renter.
There is also access for the ATO through financial institutions, who handle the payment for the online platform providers.
What the ATO will find out from the data matching
- listing owners’ name and contact details
- bank account, payee name, BSB, account number
- date and amount of payment.
Property details and activities
- rental property address
- gross rental income fees and commissions charged
- listing dates
- nights booked
- price per night
- the myriad of property activity details.
The net is cast wide
The ATO estimates that 190,000 individuals will be data matched.
The purpose of the data matching is clearly the pursuit of non-disclosed income, while the Tax Office notes their desire to promote voluntary compliance, obtain intelligence and ensure compliance.
The hidden trap – CGT
It is not just the income the ATO is looking to tax. The sleeper here is Capital Gains Tax (CGT).
If a taxpayer is renting out all, or part of their residence under an Airbnb type “Share Accommodation” type system, there will need to apportion CGT any capital gains when that residence is sold.
The exemption for a principal private residence from CGT will be adversely affected.
Taxpayers and their tax practitioners should carefully consider the benefits of Airbnb type “Share Accommodation” rental, as against Income Tax on any rental gains and CGT on a proportional basis if affecting a principal private residence, if that is the property the subject of rental under the arrangement.
In the event that there has been nondisclosure in the past, then a voluntary disclosure is needed urgently.
Upon lodging a voluntary disclosure, the penalties may be reduced by 80% and depending upon circumstances, there may be a reduction in general interest charge.
Adrian Abbott and Greg Ross would be happy to assist taxpayers and their tax practitioners in lodging such voluntary disclosures.
Information source – Notice of Data Matching Gazette – C2018G00634.
Readers should perhaps note that the issue overlaps in part with the ATO’s recent announcement on The ATO ramps up data matching for rental income which will be the subject of a following article by the writers
The text of the paper is only a summary and discussion of particular facts and principles. It is not to be taken as legal or commercial advice as to any particular factual circumstances.
LLB, BEc, FCIS, FGIA, FCA, CTA
Chartered Tax Advisor
Sydney Tax Advisory
LLB Accredited Specialist
Government and Administrative Law
Eakin McCaffery Cox