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Australian Tax Office Expands Data Matching Program

Friday, November 2, 2018

The Australian Taxation Office (ATO) has announced that it is expanding its data matching program to focus on information it receives from partner organizations on shares held by taxpayers.

The ATO receives information from the Australian Securities and Investment Commission (ASIC). The data includes details of the price, quantity, and time of individual trades dating back to 2014, and the ATO has obtained more than 500 million records. The ATO also holds information from brokers, share registers, and exchanges.

The ATO will match this data against information reported in taxpayers' returns and other ATO records.

Assistant Commissioner Kath Anderson explained: "We will use the information to identify taxpayers who have not properly reported the sale or transfer of shares as income or capital gains in their income tax returns."

"Almost one third of all Australian adults own shares, and there is evidence that some taxpayers are getting it wrong when it comes to reporting their capital gains or losses from the sale of shares. In particular, we tend to see higher rates of error among those who don't regularly trade in shares and who are not aware of the tax implications," Anderson added.

The ATO advised taxpayers to ensure that they keep good records of share purchase and sale prices, as well as costs like brokerage fees. If a taxpayer has sold part of their shareholdings, they should keep records of the parcel they sold and the parcel they are still holding.

Capital gains must be declared in the taxpayer's annual return. If a taxpayer has made a capital loss, they cannot claim it as a deduction in their return. They can however offset the loss against any capital gains made, and if there is any loss remaining, they can carry it forward to reduce any future capital gains they make.

The ATO intends to make its information on shareholdings available to taxpayers as part of the tax return prefill service in future.