What is the ATO's compliance program for High Wealth Private Groups?
The tax compliance program for High Wealth Private Groups is a program developed by the ATO to establish a high level of assurance that High Wealth Private Groups are paying the right amount of tax.
The process followed by the ATO program applies “justified trust” methodology, whereby streamlined assurance reviews of group significant transactions, events and activities affecting recent income years are conducted over approximately 4 months from initial request for information (RFI).
The diagram below illustrates the steps and timings you can expect from the review process in one to one sessions with the ATO.
What is the Next 5000?
In 2019, the ATO commenced tax compliance streamlined assurance reviews of the Next 5000 High Wealth Private Groups who together with their associates control wealth of more than $50 million.
Next 5000 review activity is gaining momentum following initial disruption due to the COVID-19 pandemic. Approximately 640 reviews have been completed to date (Aug '22), with all remaining High Wealth Private Groups due to be contacted and reviewed from 2022.
If you have not been notified, and you (and your associates) control wealth of more than $50m, it is likely you will be soon.
In our experience working with clients and trusted advisers on ATO reviews, High Wealth Private Groups who prepare early for their tax compliance reviews achieve better outcomes than those that don’t. Adverse outcomes from reviews can lead to ATO audits, significant tax payable (including interest and penalties) and additional scrutiny going forward.
There is opportunity for Groups to make voluntary disclosures in order to correct any errors. In our experience, acting quickly to review records, recent significant transactions and business events to determine whether a disclosure should be made and making it at the earliest possible stage - ideally before the ATO issues a request for information - helps to build trust with the ATO and leads to better review outcomes.
- Documented and lived Tax Governance
- Awareness and compliance with taxpayer alerts and practical compliance guidelines
- Treatment of new and significant transactions
- Unexplained variances between accounting and tax results
How we can help
Our experienced Private business, wealth and tax controversy specialists can assist you prepare early, respond confidently and build trust with the ATO throughout the review process.
With our technical expertise including Tim Dyce as special advisor, and extensive experience in assisting clients and trusted advisors on successful outcomes of “Top 500” and “Next 5000” ATO reviews, you will have peace of mind knowing you are supported by a dedicated team ensuring your experience throughout the review process is well managed and build around your needs.
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Contact us
Hayden Scott
Partner, Tax Controversy & Dispute Resolution Leader, PwC Australia
Tel: +61 488 221 199
Bruce Ellis
PwC | Private | Partner - Family Office Tax, PwC Australia
Tel: +61 3 8603 3303
Michael Barry
PwC | Private | Director, Family Office, PwC Australia
Tel: +61 403 575 280