Have you been affected by the recent Australian Tax Office (ATO) crackdown on tax returns? Here’s what to do if you feel you might need some help.
The ATO has started to issue ‘Default Assessment Warning’ letters to taxpayers who have not lodged their tax returns. Where a taxpayer does not lodge tax returns for a few years, the ATO can issue the taxpayer with one or more default assessments.
If the ATO issues a default assessments you can be up for:
- Failure to lodge on time penalties (usually $550 per return)
- Administrative penalties of 75% of their estimate of the tax you owe
CGT rules – foreign residents, temporary residents, changed residency status
There are special capital gains tax (CGT) rules that apply if you are a foreign resident or if you become, or cease being, an Australian resident. Unless otherwise specified, ‘Australian resident’ means a resident of Australia for tax purposes. There are also special rules for temporary residents. These rules do not affect assets you acquired before 20 September 1985 (pre-CGT assets).
Note: The law has been amended to remove or reduce the 50% discount on capital gains made after 8 May 2012 by foreign residents on taxable Australian property.