Wealth Management

Taxman to target executive pay packets and self-managed super funds

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The Australian Taxation Office has put executive pay, wealthy individuals, property and share investors and self-managed superannuation funds at the top of its list of targets for the 2008-09 tax audit season.

The Australian Taxation Office has put executive pay, wealthy individuals, property and share investors and self-managed superannuation funds at the top of its list of targets for the 2008-09 tax audit season.

Tax office second commissioner Jennie Granger said it would continue to dedicate special attention to the remuneration of executives and director of public company and would also extend its surveillance to examine the pay packets of private company executives and executives of foreign-based multinationals.

The growing number of investors in shares and property, either directly or through self-managed super funds, has also forced the tax office to step up its efforts to monitor these groups.

“Saving for retirement is important and in particular we’ll be focusing on compliance with the system there,” Granger said in a webcast on the tax office website.

Granger trumpeted a new tool that the tax office will use to monitor self-managed super funds called eSAT. “It really does step you through identifying what the contraventions are and then rolls it up into a report,” Granger says.

The tax office’s targetting of high net worth individuals is also set to continue. It has been heavily scrutinizing the tax affairs of individuals who use offshore bank accounts or similar facilities – as seen by its current audit of billionaire Frank Lowy – while also trying to build better relationships with rich taxpayers and their tax agents.

In April, the tax office sent letters to more than 1400 people with net assets of $30 million or more, asking them to get their tax affairs in order.

There’s a lot more emphasis on what we can do to give people certainty and what guidance we can give them to avoid pitfalls, and if they do actually end up in the pitfall what they can do to self correct.”

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