The source of funds used by parents to pay for private school tuition fees is latest area of investigation by the Australian Tax Office (ATO). The ATO has obtained information from private schools that will be used to compare against parents’ tax returns. This latest use of data matching will look for discrepancies between the cost of educating children and the income levels of the parents.
Following the conclusion of ‘Project DO IT’ the ATO is concerned that some families are using earnings from undisclosed, offshore accounts to fund the tuition costs of their children. By doing this, they are avoiding Australian taxes on the income.
With the increase in the sophistication and amount of data matching undertaken by the ATO both domestically and globally it is imperative that your income is appropriately declared to the ATO.