Capital Gains Tax and document retention

[VYBerlinaV8]

Hi All - sorry if this has been covered before, I couldn't find it using search...

If I own an asset for greater than 7 years, can the ATO compel me to produce documents showing the purchase price, or can I hide behind the argument of 'only keeping records for 7 years'?

I'm not planning to do this, but am curious as to what record keeping requirements mean to tax liabilities in this case.

Thoughts?

 

[Propertunity]

If I own an asset for greater than 7 years, can the ATO compel me to produce documents showing the purchase price, or can I hide behind the argument of 'only keeping records for 7 years'?

Actually I think it is 5 years now.

I'm not planning to do this, but am curious as to what record keeping requirements mean to tax liabilities in this case.

With investments - IPs and the like, you will effectively need to keep your records forever.

 

[Jonathon]

Your state registry office (or equivalent) will have the purchase date and price on file, from when the stamp duty was paid. The ATO can access that data very easily.

 

[The Y-man]

I assume that would be the least of the problems - I'd be more worried about keeping all the receipts for capital item works?

Cheers,

The Y-man

 

[Propertunity]

I assume that would be the least of the problems - I'd be more worried about keeping all the receipts for capital item works? Cheers, The Y-man

Yes, that is what I was alluding to. PLUS everytime you refi some cash out of an IP for a deposit on another etc.

 

[marg4000]

The ATO says you must keep all records for 5 years AFTER you dispose of the asset.
So better keep filing the paperwork.
If you can't prove something you can bet any decision will be in favour of the ATO.
Marg

 

[VYBerlinaV8]

Makes sense, thanks for the comments.

 

[Ausprop]

it's never really safe to dispose of tax documents. they also need to passsed down to beneficiaries of your will

 

[dr.jauncey]

Hi, the usual time for keeping records may only be a few years but keep in mind that the tax office can go back as far as they like if they suspect something is fishy.

Scanned documents have been certified as being acceptable for record keeping. So perhaps keep an electronic copy of everything (backed up and stored off-site for protection). You might accumulate something of a file but that's better than a mountain of paperwork.