High-income earners targeted by ATO
Financial planners handling the affairs of senior executives and high-income earners, particularly those involved in employee share plans, have received a warning from the Commissioner for Taxation, Michael D’Ascenzo.
In an address to an Australian Institute of Company Directors conference, D’Ascenzo said that consistent with an announcement last year, the Australian Taxation Office (ATO) had been reviewing the tax affairs of high-income individuals with remuneration in excess of $1 million.
He said as part of that process, the ATO had been reviewing remuneration and incentives such as shares, options and rights, cash bonuses and non-income capital benefits.
The Taxation Commissioner said that initial assessment indicated employee share plans were a potential risk.
He said the ATO had looked at 1,914 public companies, including the top 300 companies, and of these companies 160 had been identified as having employee share plans.
“As at 30 June, 2007, 601 individuals, who are in the top five highest-paid directors or executives in the above 160 companies, were identified as having a possible taxing point under a share plan,” D’Ascenzo said. “Of these, 216 have potential discrepancies relating to a cessation time, some over multiple years.”
He said while there might be various explanations for the discrepancies, the ATO was in the process of sending individual questionnaires to a test pool of 30 individuals seeking clarification, with more being prepared.
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.