chancellors

Federal Budget Trust Changes

Tue, 07 Jul 2026 05:33:47 GMT

Client Note

Discretionary Trust Changes — 30% Minimum Tax

Relevant to clients with trust structures, corporate beneficiaries and inter-entity distributions

Core change

The Government has proposed a new 30% minimum tax on discretionary trusts from 1 July 2028. While detail remains incomplete, the direction is toward reduced flexibility and higher baseline taxation.

What this means (practically)

• Income splitting benefits largely removed
• New trustee-level tax applied regardless of beneficiary tax position
• Non-refundable credits create inefficiencies for many distributions
• Corporate beneficiary strategies materially impaired

• Testamentary trusts retain their tax status after reluctant political backflip

Practical implications

• Effective tax rates on trust income increase across most scenarios
• Trusts become less effective as income planning vehicles
• Asset protection remains a primary justification for using a trust
• Greater emphasis on alternative structures (companies, individuals, super)

Key risks

• Effective rates approaching or exceeding 60% in some structures
• Complex and costly restructuring decisions without full legislative clarity

• Exposure to Imputation credit policy shift and other tax risks via company structures

• Trapped credits and inefficient income flows are possible under the new system
• Interaction with other Budget measures - increasing overall tax burden

Immediate considerations

• Do not implement structural changes prematurely

• Review role of trusts within overall family structure
• Identify areas of complexity and potential simplification opportunities
• Consider alternative ownership models where appropriate

Our view

The direction of tax policy is clear — discretionary trusts will no longer provide the flexibility they once did. Their ongoing role will be narrowed toward asset protection and structural control rather than tax optimisation. A measured, coordinated review of all structures is essential before acting.

Chancellors Chartered Accountants | Private Wealth Advisory

2026/27 Federal Budget CGT and Negative Gearing Changes

Tue, 07 Jul 2026 05:27:20 GMT

Client Note

CGT & Negative Gearing Changes — Investment Implications

Relevant to clients holding investment assets, property portfolios and long-term growth positions

Core change

The Budget proposes replacing the 50% CGT discount with CPI indexation combined with a 30% minimum tax from 1 July 2027. Negative gearing is also being restricted for new residential property investments. Certain as yet undefined “new builds” are to be excluded from the changes.

CGT Implications

• Higher effective tax on most growth assets exceeding inflation
• Reduced flexibility in timing capital gains to optimise tax outcomes
• Pre-CGT assets become taxable on gains after 1 July 2027
• Increased reliance on valuations and dual record keeping

Negative gearing implications

• Losses on new properties quarantined against property income and gains
• Reduced attractiveness of leveraged residential investment
• Existing assets largely grandfathered but structurally impacted over time

Key risks

• Underestimating effective tax on long-term capital growth
• Costly valuation requirements and compliance burden
• Reduced after-tax investment returns

• Main residence as an unproductive “go to” asset class may face future tax policy risk
• Structural mismatch between investment strategy and tax outcomes

Immediate considerations

• Prepare for asset valuations prior to 1 July 2027
• Reassess long-term investment holding strategies
• Review property portfolios in light of reduced tax benefits

• Reconsider tax profiles of growth assets, overall asset mix, and holding structures
• Avoid premature restructuring until final legislation is known

Our view

These changes significantly alter the economics of growth investing and property ownership. The practical outcome is a shift toward higher taxation of capital and reduced reliance on tax-driven investment strategies. Decisions should now be based on after-tax returns under the new rules rather than legacy assumptions.

Chancellors Chartered Accountants | Private Wealth Advisory

Div 296 - New Superannuation Tax

Tue, 07 Jul 2026 05:13:32 GMT

Client Note

Division 296 — What It Means for Large Super Balances

Relevant to members with (or approaching) $3m+ superannuation balances

Core change

From 1 July 2026, an additional personal tax applies to superannuation balances exceeding $3 million. The tax is calculated on realised earnings attributable to balances above key thresholds, currently $3m and $10m.

What this does

• Effective tax on super earnings increases to ~30% between $3m–$10m and ~40% above $10m
• Pension-phase assets are no longer fully shielded from additional tax
• The tax is assessed personally (not at the fund level)
• Thresholds are indexed but recalculated annually based on total super balance

What has changed materially

• Unrealised gains are NOT taxed as was originally proposed
• Early-year withdrawals (before 30 June 2027) can reduce initial exposure
• From 2027/28 onward, calculations use the higher of opening or closing balances — limiting withdrawal strategies

Interaction with wider Budget changes

• Proposed 30% minimum tax on discretionary trusts significantly weakens traditional alternatives
• Post-Budget, super at 30–40% is often competitive relative to trust structures
• Investment companies and lower-income personal ownership become the main alternatives

Key risks

• Exiting super can trigger significant one-off CGT and transaction costs
• Liquidity pressure for SMSFs holding illiquid assets (property, unlisted investments)
• Estate planning complications, particularly for surviving spouses, delays in estate administration due to delayed assessment of personal tax
• Overreacting to the tax without modelling long-term outcomes

Immediate considerations

• Obtain accurate super balance (TSB) position prior to 30 June 2026
• Review asset valuations — particularly for SMSFs
• Consider strategies to equalise balances between spouses
• Model whether fund liquidity is sufficient to meet future tax liabilities
• Avoid major structural changes until broader tax settings are finalised

Our view

Division 296 reduces the attractiveness of very large super balances, but it does not eliminate super as a preferred structure. In many cases — particularly post-Budget — remaining within super will continue to be competitive once all costs, risks and alternatives are considered. Decisions to exit should only be made following detailed modelling across a long-term horizon.

Chancellors Chartered Accountants | Private Wealth Advisory

2026 Financial Year End Overview

Tue, 07 Jul 2026 05:03:05 GMT

Client Note

2026 Budget & Structural Tax Changes - What Matters (Year End Overview)

For established family groups with layered structures, superannuation and investment asse ts

Core direction

The 2026 Budget and related reforms represent an ideological shift rather than tax reform. The combined effect is higher effective tax rates, significantly increased complexity, and greater reliance on compliance enforcement across all traditional family group structures. The broader economy is suffering from low growth, low productivity and inflation due to policy settings smothering various inputs to the economy.

What has changed

• New Division 296 tax introduces additional tax on super balances above $3m
• Proposed 30% minimum tax on discretionary trusts from 2028
• Significant changes to CGT treatment and negative gearing rules
• Increased ATO compliance focus supported by additional funding
• Expanded regulatory burden (e.g. AML/Cybersecurity and practitioner reporting obligations)

What this means (practically)

• Traditional planning structures (trust + bucket company) are materially less effective
• Superannuation above $3m is less concessional, but remains competitive relative to alternatives
• Compliance and documentation standards are rising sharply across all entities

• Technicalities and complexity are being exploited for extra tax revenue.
• Structuring decisions must now be considered in combination — not in isolation
• Simplicity and defensibility are increasingly valuable attributes

Key risks

• Higher effective tax outcomes across multiple structures
• Increased likelihood of ATO audit activity and challenges
• Costly restructuring decisions made prematurely or without full modelling
• Legacy arrangements becoming non-compliant under current interpretations

Immediate considerations

• Avoid major restructuring until key legislation is finalised
• Review complexity across structures and identify areas for simplification
• Ensure documentation, valuations and internal governance are current
• Assess exposure to superannuation thresholds, trust structures and compliance risks
• Focus on long-term positioning rather than short-term tax outcomes

Our view

The consistent theme across all changes is a move away from flexible, planning-driven outcomes toward rigid, compliance-driven outcomes. For most family groups, the optimal response is not aggressive restructuring, but a coordinated review of the overall position with an emphasis on simplicity, control, and long-term resilience.

Chancellors Chartered Accountants | Private Wealth Advisory

ATO Compliance Trends & Risk 2026

Tue, 07 Jul 2026 04:53:39 GMT

Client Note

ATO Compliance Trends & Risk 2026 — What Matters Now

Relevant to business owners, trustees and family groups with multiple entities

Core message

The ATO has shifted decisively toward enforcement. Increased funding, data matching and expanded regulatory obligations mean that documentation, governance and consistency of behaviour are now more important than technical structuring.

What has changed

• Significant increase in ATO compliance funding and audit activity
• Interest on ATO debts is no longer tax deductible
• Expanded reporting obligations (AML/CTF, breach reporting)
• Greater scrutiny of trusts, Division 7A, and related party transactions
• Increased reliance on data matching across systems

What this means (practically)

• Structures alone are no longer sufficient — substance must align with documentation
• Historical arrangements are being revisited under new (mostly untested) interpretations
• Poor documentation is now a primary audit trigger
• Cashflow and tax debt management has become more critical
• Firms are being forced into greater due diligence on their clients

Key risk areas

• Trust distributions, documentation and beneficiary entitlements (s100A, UPEs, FTDT)
• Division 7A loans and undocumented arrangements, benefits from company assets
• Rental property claims and interest deductibility, new interpretations on holiday houses
• GST and BAS reporting inconsistencies
• Related party transactions without formal agreements

Immediate considerations

• Ensure all year-end actions are completed before 30 June (not after)
• Review and update all related party agreements (loans, services, leases)
• Reassess trust documentation, elections and distribution processes
• Reduce reliance on ATO debt — consider refinancing where appropriate
• Improve record keeping and ensure consistency across tax, accounting and cash flows

Our view

The dominant theme is a shift from technical optimisation to defensibility. Most issues now arise from mismatch between documentation, intent and actual behaviour. The appropriate response is not more complexity, but greater discipline in how existing structures are operated and recorded. Family groups should consider review of structure and simplification to counter the shifting attitude toward existing arrangements

Chancellors Chartered Accountants | Private Wealth Advisory

Division 296 - The New $3m Super Tax Explained

Thu, 02 Jul 2026 05:25:26 GMT

From 1 July 2026, an extra tax applies to super balances above $3 million. Here is what it means in plain English, when it pays to act, and where the traps lie — including how the 2026/27 Federal Budget changes the case for leaving super behind.

1. The Basics in 60 Seconds

Brand new tax: Division 296 is a separate, additional tax that sits on top of all existing fund-level and personal taxes. It is assessed to the member personally, not the super fund (although you can elect to have it paid from your super via a release authority).

Start date: 1 July 2026. The ﬁrst measurement point is 30 June 2027 and the ﬁrst assessments will be issued by the ATO – likely sometime in 2028 for SMSF members.

Two thresholds (indexed): the Large Super Balance Threshold (LSBT) of $3 million and the Very Large Super Balance Threshold (VLSBT) of $10 million. Both index to CPI in jumps of $150,000 and$500,000 respectively.

The formula :

15% × (proportion of TSB over $3m) × earnings

10% × (proportion of TSB over $10m) × earnings

"Earnings" means: your share of the fund's realised investment income (dividends, interest, rent, trust distributions, franking credits) plus realised capital gains (after the 1/3 super CGT discount), less tax-deductible expenses. GOOD NEWS: unrealised gains are NOT taxed – the controversial original proposal was dropped before the law passed.

Transitional rule for 2026/27 only: the proportion is based on your TSB at 30 June 2027 only. So withdrawing super before 30 June 2027 (if you are eligible) can reduce or eliminate the ﬁrst year's bill. WARNING: from 2027/28 onwards the calculation uses the HIGHER of your opening or closing balance – large mid-year withdrawals will no longer save you.

2. What Does It Do to Total Tax on Fund Income & Gains?

The table below shows the total eﬀective tax rate (fund tax + Div 296) on each layer of a member's balance, on realised investment income and on realised long-term capital gains (after the 1/3 super CGT discount).

3. How Does It Compare to Personal Marginal Rates and Other Structures?

The comparison below shows where each common structure sits today and where it will sit from 1 July 2028 once the 2026/27 Federal Budget's proposed 30% minimum tax on discretionary trusts takes eﬀect.

Note: This table needs to be considered in conjunction with other changes announced in the Budget and to tax settings outside od super mor generally.

What this comparison really tells us

BIG SHIFT: The 2026/27 Budget's proposed 30% minimum tax on discretionary trusts from 1 July 2028 closes oﬀ the historical "withdraw from super and stream via a family trust + bucket company" alternative for most clients.

TIP: Super inside Div 296 territory (30% – 40%) is, paradoxically, more competitive after the Budget than it was before — because the main alternative (trust + bucket company) has moved from 25% – 37% eﬀective to a 30% minimum (or ~69.7% if a corporate beneﬁciary is still used).

WATCH-OUT: The clear winners from the Budget package are (a) personal ownership in a low-income spouse's name, (b) standalone investment companies, and (c) super up to $3m. Fixed/unit trusts remain available but the protective beneﬁt is weak and the ﬁxed-trust deﬁnition is still being ﬁnalised.

WARNING : Franking policy risk is elevated. Successive governments have ﬂagged interest in limiting franking credit refundability. Don't build a structure that only works if franking refunds continue indeﬁnitely.

4. Should I Increase or Reduce My Super Balance?

Scenario-based pointers

Below $3m today: Generally KEEP CONTRIBUTING. Super at 15% / 10% eﬀective is still the most tax-eﬀective wrapper available. Maximise concessional carry-forward (if TSB under $500,000) and NCC bring-forward (if TSB under $1.76m at 30 June 2025) before your balance grows close to $3m.

Approaching $3m: Be deliberate. A small breach of $3m only attracts Div 296 on a small proportion of earnings, so it is rarely a reason to stop contributing entirely. TIP: consider splitting contributions to a lower-balance spouse to keep both balances under $3m.

Between $3m and $5m: Review annually. In most cases staying in super still wins – especially if you are in pension phase with strong franking credit refunds. Model with realistic asset turnover (low turnover = low realised earnings = low Div 296).

Between $5m and $10m: Genuine alternatives start to make sense — but post-Budget, the realistic options are a low-income spouse's personal name or a standalone investment company, not a family trust + bucket company. Model after-tax 10–15 year returns including the one-oﬀ exit cost.

Over $10m: Strong case to consider partial withdrawals if eligible (typically age 60+ and condition of release met). The 25% Div 296 layer above $10m bites quickly. The destination is most likely an investment company or low-bracket spouse — see Section 6.

WARNING : don't let the Div 296 tail wag the dog. The cost of EXITING super — fund CGT on disposal or in-specie transfer, plus stamp duty on property, plus transaction costs — is often a much bigger one-oﬀ hit than several years of Div 296. Model both before deciding.

5. Is It Worth Withdrawing and Investing Elsewhere?

The honest answer: sometimes – but rarely as obvious as it ﬁrst appears.

The decision depends on ﬁve variables that interact:

Ongoing tax diﬀerential: Div 296 eﬀective rate (30% or 40%) vs the alternative entity's post-2028 rate (e.g. 25% / 30% investment company; marginal rates in a low-bracket spouse's name; not a discretionary trust at the new 30% minimum).

One-oﬀ exit cost: The fund realises CGT on every asset sold or transferred out. If your SMSF holds property bought 15 years ago, this can be a very large tax event – often dwarﬁng 5–10 years of Div 296 tax.

Loss of pension-phase exemption: Future earnings inside a pension up to the Transfer Balance Cap are exempt from fund tax (though not from Div 296). Once you withdraw, that exemption is gone forever.

Time horizon: Younger members have more years for Div 296 to accumulate; older members closer to estate-planning events may prefer to stay in and use the death-time TSB reset (see Section 7).

Fund liquidity: SMSFs with lumpy illiquid assets (commercial property, private company shares, unlisted units) may struggle to fund a Div 296 release authority. STRATEGY: model liquidity NOW so you are not forced to sell at the wrong time later.

Don’t forget Death Beneﬁts Tax: Where beneﬁts are ultimately paid to non dependants for tax purposes (e.g. adult children), the taxable component is generally subject to 15% + Medicare levy (eﬀectively 17%). STRATEGY: Integrate estate-planning timing into the Div 296 decision—not after it

6. The 2026/27 Federal Budget – What it Means for the "Take it Out of Super" Decision

The 2026/27 Federal Budget's biggest impact on the Div 296 decision is not what it did to super – it's what it did to the alternatives. Three changes materially aﬀect whether withdrawing from super and re-investing elsewhere makes sense.

a) 30% minimum tax on discretionary trusts from 1 July 2028

The trust + bucket company model that has historically been the go-to alternative to super has eﬀectively been neutered. Super at 30% – 40% eﬀective may now be the BETTER answer.

b) Personal tax cuts from 1 July 2026 and 1 July 2027

Personal marginal rates are falling slightly; the top bracket remains at 47% but middle brackets reduce. This very modestly improves the case for holding investments in a low-income spouse's name — particularly a retired or part-working spouse. TIP: Equalising super between spouses (contribution splitting, re-contribution strategies) remains the single most powerful pre-30 June lever for managing combined Div 296 exposure.

c) Other Budget items that interact

CGT discount and negative gearing changes will generally increase the tax on investments held outside of super.

WARNING : Any decision to wind down super and rebuild outside should NOT be made until the trust tax legislation is enacted (expected late 2026) and the rollover relief window detail is published. Premature restructuring is the bigger risk than waiting.

Putting it together – should you still consider exiting super?

The Budget has reshuﬄed the deck enough that pre-Budget advice on this question is now usually wrong. The post-Budget rules of thumb:

Under $3m: Keep contributing. The story hasn't changed for you.

$3m – $5m: In most cases, STAY. The post-Budget alternatives are now also taxed at around 30% (or higher) and lack super's pension-phase exemption on the ﬁrst $3m.

$5m – $10m: Situational. The realistic alternatives are a low-income spouse's personal name or a standalone investment company. The 30%-minimum trust is rarely the answer post-2028.

Above $10m: There is still a real case for partial withdrawal, but the alternative is now most likely a standalone investment company (25% / 30% on income, no CGT discount) or holdings in a low-income spouse's name. Model with the 2027/28 alternative tax rules in mind, not today's.

IMPORTANT: A decision that looked obvious 12 months ago “pull it out and use a family trust" — is now usually wrong. Don't act on pre-Budget advice without re-running the numbers.

1. Estate Administration – A Signiﬁcant New Problem

Division 296 introduces some diﬃcult issues for executors and surviving spouses that have not previously existed in relation to their super.

Death resets TSB to nil – but only going forward: From the year AFTER death there is no further Div 296 liability on the deceased. BUT the deceased's estate will still receive a Div 296 assessment for the YEAR OF DEATH if their opening TSB was Example: A member dies in June with $5m in super. Earlier in the year the SMSF sold a property crystallising a $1m capital gain. The estate gets a Div 296 bill calculated on the proportion of those earnings above $3m – potentially well over $100,000 – even though the member is no longer alive.

Reversionary and death beneﬁt pensions to a spouse: Inherited super instantly adds to the surviving spouse's TSB (no 12-month grace like the Transfer Balance Cap rules). A spouse with $2.5m of their own super who inherits $3m may immediately be pushed into Div 296 territory for the rest of their life.

WATCH-OUT: If a death is anticipated, the timing of asset sales inside the fund matters. Realising a large capital gain in the year of death can create a Div 296 liability that wouldn't exist if the sale were deferred. Conversely, sales after 30 June following death attract no Div 296 (deceased's TSB is nil).

STRATEGY: Re-contribution strategies, BDBNs and reversionary pension nominations all need a refresh – especially where the surviving spouse already has substantial super in their own right. Splitting beneﬁts to adult children (where eligible) may be more tax-eﬀective than reversion to spouse.

Insurance proceeds into super: If life insurance is paid into the fund on death and retained in pension phase by the spouse, it increases the spouse's TSB and Div 296 exposure. Consider whether some or all should be paid out as a lump sum to the estate instead.

WARNING – cashﬂow timing: LPRs may receive a Div 296 assessment 12–18 months after year end (SMSFs lodge late). If the death beneﬁt has already been paid out, the executor may have no super left to pay the bill from. The liability falls on the estate. Hold back suﬃcient cash until the Div 296 position for the year of death is ﬁnalised.

Next Steps – What to Do Before 30 June 2027

1. Get an accurate TSB picture by 30 June 2026 (and refresh annually). Identify any members likely to exceed $3m at 30 June 2027.

2. Refresh SMSF asset valuations with supportable evidence – this is now critical, not just good practice.

3. Consider the SMSF cost-base reset election for pre-1 July 2026 assets (an irrevocable, all-or-nothing decision made before the 2026/27 annual return is due).

4. Model fund liquidity for a Div 296 release authority – particularly for SMSFs holding property or unlisted assets.

5. Review estate planning documents – BDBNs, reversionary nominations, insurance ownership, and surviving-spouse TSB exposure.

6. Wait for the trust tax legislation before committing to any wind-down of super – the alternative-structure rules are still being ﬁnalised.

7. Talk to us BEFORE acting on any lump-sum withdrawal or restructure. The numbers genuinely need to be modelled.

Disclaimers

Financial Product Advice

Nothing in this advice is intended as ‘ﬁnancial product advice’ as deﬁned by the Corporations Act (as amended by the Financial Services Reform Act 2001). We are not licensed to provide ‘ﬁnancial product advice’ which includes recommendations regarding contribution to or withdrawal from, or speciﬁc investments within a particular superannuation fund (including a Self-Managed Superannuation Fund). You should consider if it is in your interests seeking advice from an Australian Financial Services Licensee before making decisions in relation to a ﬁnancial product.

Currency of Income Tax Advice

Any taxation advice included in this correspondence is current to the date of writing. Taxation laws in Australia are complex and constantly changing. The government often changes rules eﬀective from the date announced and, in some cases, retrospectively. If there is any delay in the use of this advice you should consider having it refreshed.

Quality of information

Before relying on the information on this newsletter, users should carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain professional advice relevant to their particular circumstances. We and associated parties cannot guarantee nor assume any legal liability or responsibility for the accuracy, currency or completeness of the information or material.

Links to external websites

This newsletter may contain links to other websites which are external to our newsletter and website. It is the responsibility of the user to make their own decisions about the accuracy, currency, reliability, and correctness of information contained in linked external websites.

Linkage to external websites should not be taken to be an endorsement or a recommendation of any third-party products or services oﬀered by virtue of any information, material or content linked from or to this website. Users of links provided by this website are responsible for being aware of which organisation is represented or providing the information or material on the website they visit.

Views or recommendations provided in linked websites do not necessarily reﬂect our views or recommendations, nor the views or recommendations of associated parties.

Security of our website

Users of our website should be aware that the World Wide Web is an insecure public network that gives rise to a potential risk that a user's transactions are being viewed, intercepted, or modiﬁed by third parties or that ﬁles which the user downloads may contain computer viruses or other defects.

We and associated parties accept no liability for any interference with or damage to a user's computer system, software or data occurring in connection with this website. Users are encouraged to take appropriate and adequate precautions to ensure that whatever is selected from this website is free of viruses or other contamination that may interfere with or damage the user's computer system, software, or data.

Liability limitation

Liability limited by a scheme approved under Professional Standards Legislation. Conﬁdentiality Notice: The contents of this e-mail and any attachments are conﬁdential. It must not be used, distributed, copied or read by any person other than the addressee. If this transmission has been received by any person other than the addressee please return to us immediately. Unauthorised

use, disclosure, copying or reliance on the contents or attachments of this e-mail by anyone other than the named addressee may be unlawful

2026 Year End Housekeeping & ATO Focus Areas

Thu, 02 Jul 2026 02:54:56 GMT

Here we outline some important issues relevant to year end and generally. Please contact us if you would like to review your individual circumstances.

INDIVIDUALS

Private Hospital Cover vs Medicare Levy Surcharge (MLS): Consider whether your income and reportable beneﬁts could trigger MLS of up to 1.5% if you don't hold qualifying hospital cover for the full year. 2025/26 thresholds (lifted 1 July 2025): Singles tier 1 starts at $101,001; Families at $202,001 (+$1,500 per dependent child after the ﬁrst). WARNING: It is not possible to retrospectively insure to avoid the surcharge.

Consider Varying 2027 PAYG Instalments or PAYG Withholding: Anticipated reduced investment income may warrant a PAYG Variation. Likewise, signiﬁcant anticipated deductions may justify applying for lower PAYG withholding via your employer.

Stage 3+ Personal Tax Cuts: Further personal tax cuts apply from 1 July 2026 and again from 1 July 2027. Where possible, deferring assessable income into 2026/27 (or accelerating deductions into 2025/26) may yield a permanent rate-driven saving.

Commonwealth Seniors Health Card (CSHC): Basic requirements are Age Pension age (67), residency, and an income test. TIP: Income thresholds (from 20 March 2026) are now $101,105 for singles, $161,768 for couples, and $202,210 for couples separated by illness. Note also that deeming rates increased from 20 March 2026 (1.25% lower / 3.25% upper), which can push assessed income up even where actual earnings are unchanged.

Deductible Expense Prepayments: An immediate deduction can be claimed by an individual incurring deductible non-business expenditure (e.g. interest on rental properties or investment portfolios) where the prepayment does not exceed 12 months and the eligible service period ends in the next ﬁnancial year. WARNING: If a prepayment does not meet the 12-month rule, an immediate deduction cannot be claimed. Instead, the deduction must be apportioned over the eligible service period or 10 years, whichever is less.

Donations: Many donations are tax deductible (including certain political donations up to $1,500 pa for individuals). Consider directing receipts to the highest income earner. Check DGR status at abn.business.gov.au/Tools/DgrListing.

Government Superannuation Top-Ups and Incentives (2025/26):
Super Co-Contribution up to $500, phasing out where 2025/26 "total income" exceeds approximately $62,488.
Low Income Super Tax Oﬀset (LISTO) up to $500, phases out fully where "adjusted taxable income" exceeds $37,000 (threshold rises to $45,000 and the maximum lifts to $810 from 1 July 2027).
Spouse Contribution Tax Oﬀset up to $540 where adjusted spouse income is less than $40,000.

Quantity Surveyor Reports: If you are acquiring or have recently acquired an investment property, ensure capital allowance claims are maximised by obtaining a Quantity Surveyor report. Diﬀerent rates apply depending on the type of building and the period when construction commenced.

Non-Business Asset Write-Oﬀs Up to $300: Salary & wage earners and investors don't beneﬁt from the small business $20,000 instant asset write-oﬀ, but can claim immediate write-oﬀs for assets costing $300 or less (not part of a set with combined cost exceeding $300).

NEW – ATO Interest Charges No Longer Deductible: From 1 July 2025, General Interest Charge (GIC) and Shortfall Interest Charge (SIC) incurred are NOT deductible – regardless of which income year the underlying debt relates to. Non-business individuals (e.g. employees, passive investors) cannot deduct interest on borrowings used to reﬁnance personal tax debts either. The practical message: clear personal tax debts faster — the after-tax cost of carrying ATO debt has roughly doubled.

BUSINESS

Payday Super Starts 1 July

Reminder: From 1 July 2026, employers must pay superannuation guarantee contributions at the same me as

wages (i.e., on each pay run), not quarterly :

⚠WARNING: If you are not ready for this new system or run it with incorrect data you risk large SGC penalties

Compulsory Super Increase : The SG rate reached its legislated final level of 12% from 1 July 2025.

Pay Employees' Superannuation Before 30 June 2026 : Superannuation is not deductible in the current year unless received by the fund on or before 30 June. Pay early to allow for clearing house delays.

IMPORTANT – SBSCH Closing & Payday Super Starts 1 July 2026 : The Small Business Superannuation Clearing House (SBSCH) will be closed from 1 July 2026 as Payday Super commences on this date. From 1 July 2026, employers must pay SG contributions on each pay event (not quarterly). Get your payroll systems, so ware and cashflow modelling ready now.

DEPRECIATION – $20,000 Instant Asset Write-Off : Businesses with aggregated turnover under $10m may deduct in 2026 the full cost of eligible depreciating assets costing less than $20,000, first used (or installed ready for use) between 1 July 2025 and 30 June 2026. The $20,000 limit applies on a per-asset basis, so multiple assets can each be written off. Assets of $20,000 or more go into the simplified depreciation pool (15% / 30%), and the closing pool balance can be written off if under $20,000. TIP: Paying for or invoicing an asset by 30 June 2026 is not enough – it must be installed ready for use by 30 June 2026 to qualify. WARNING: From 1 July 2026 the threshold technically reverts to $1,000 unless the 2026-27 Budget proposal to make $20,000 permanent is legislated. The five-year 'lockout' for SBEs that opt out of simplified depreciation also recommences from 1 July 2026 – think carefully before opting out this year.

STRATEGY – Refinance ATO Tax Debts: Because GIC/SIC incurred from 1 July 2025 is non-deductible, business taxpayers should consider refinancing outstanding tax debts with a bank loan. Interest on borrowings used to pay business tax (income tax or GST) debt remains deductible under s.8-1 per IT 2582, effectively converting nondeductible GIC into deductible interest – often at a lower headline rate too. (Note – this strategy is not available to non-business taxpayers, partners borrowing for personal tax, or for borrowings used to pay a beneficiary's personal tax liability.)

Prepayments Deductible for Small and Medium Businesses 2025/26 : Immediate deductions available where aggregated turnover is less than $50m and the prepayment does not exceed 12 months with the service period ending in 2026/27. WARNING: If a prepayment does not meet the 12-month rule, the deduction must be apportioned over the eligible service period or 10 years, whichever is less.

Don't Forget TPAR Reports : Taxable Payments Annual Reports for payments to contractors in building & construction, cleaning, courier and road freight, IT services, and security industries are due by 28 August 2026.

Consider Timing of Invoicing : Under accruals accounting, revenue is typically recognised when a recoverable debt arises. WARNING: Aggressive manipulation of invoicing could be challenged under an-avoidance rules.

Accruing Expenses by 30 June : Salary and wages for work performed to 30 June, employee bonuses and commissions definitively committed to, director fees authorised by resolution, and accrued rent / interest may be deductible in 2025/26 even if paid in 2026/27.

Bring Forward Expenditure : Consider bringing forward repairs, client gifts, and superannuation contributions (own or employee) into 2025/26 — contributions must be received by the fund by 30 June 2026 to be deductible.

Trading Stock Valuation : Choose the year-end valuation method (cost, market selling value, or replacement value) that minimises taxable income. SBEs (and businesses under $50m turnover) using the simplified trading stock rules may elect not to account for stock changes of $5,000 or less.

Review Bad Debts Pre-30 June : Evidence the decision to write off a bad debt must exist on or before 30 June 2026 (per TR 92/18). A minute or contemporaneous accounting entry is sufficient.

Wages to Spouses and Children : Ensure deductible wages are actually incurred, preferably paid by year end, and documented. WARNING: Deductions are limited where payment is unreasonable.

Inter-Entity Transactions : Ensure these are commercially reasonable and properly documented.

STRATEGY – Small Business Restructure Rollover (SBRR) : If your business has outgrown its current structure, the SBRR in Subdivision 328-G can defer income tax / CGT on transferring ac ve assets between SBE-eligible en es without a material change in ul mate economic ownership. Can be applied asset-by-asset alongside the CGT small business concessions. Note – the rollover does not cover stamp duty, GST or FBT (although the GST going-concern exemption may apply).

CAPITAL GAINS AND LOSSES

CGT Events and Timing : A CGT Event usually occurs at the contract date, not settlement. TIP : Seek advice early if a significant capital gain is anticipated – planning options diminish after 30 June.

Offsetting CGT Losses : CGT losses cannot be carried back. Consider realising capital losses by year end where strategically beneficial. WARNING: Deliberate "wash sales" may be attacked by the ATO as tax avoidance. Transfers between related people or entities may be justifiable on other grounds such as consolidation of multiple holdings.

TRUSTS

Trust Distributions : Distributions must be determined by trustees prior to 30 June. We will send draft minutes to clients. Special attention is required given ongoing complexity around s.100A, Owies-style considerations, and unpaid present entitlements. WARNING: Trust distribution minutes cannot be altered after 30 June.

New Beneficiary Notification : Trustees must report TFN details of any new beneficiaries (including minors turning 18 during the year). Failure means 47% TFN withholding on entitlements.

Unpaid Trust Entitlements : Continue to be a focus area – attention must be paid to how and when UPEs of a beneficiary are used, and that they only ever benefit the intended recipient.

COMPANIES

Company Tax Rate : Qualifying Base Rate Entites (aggregated turnover under $50m and no more than 80% passive income) remain at 25% for 2025/26. Other companies remain at 30%.

Private Company Loan (Division 7A) Compliance : Minimum repayments on pre-exis ng Div 7A loans must be physically received by 30 June 2026 – any shortfall is treated as a deemed unfranked dividend. Our clients with Div 7A loans have been advised of 2026 loan payment requirements. New loans arising in FY2026 must be repaid or placed under a complying Div 7A loan agreement by the lodgement date of the FY2026 company tax return (with the first minimum repayment by 30 June 2027). WARNING: Loan recycling (drawing similar or larger amounts a er repayment) may be ignored by the ATO.

Franked Dividends : Carefully me (and stream where possible) franked dividends. Consider whether declaring a dividend prior to 30 June is beneficial. Comment: Companies sittng on large franking reserves should consider the longer-term risk of franking system changes that might reduce the value of stored franking credits.

SUPERANNUATION – Pre & Post 30 June Considerations

SMSF Minimum Income Stream Payments : SMSFs paying pensions must ensure minimum annual payments are made by 30 June 2026 to preserve tax exemption. Standard minimum percentages apply (4% under 65, scaling to 14% at 95+) — the COVID-era 50% reduction no longer applies.

SMSF Documenta on & Valuations : Property and unlisted assets should ideally be re-valued annually (or at least every 3 years), supported by comparable sales / market rents (for property) and financial reports / minutes (for unlisted entites). WARNING: With Div 296 commencing 1 July 2026 (see below), annual valuations are now critical – consider an automatic annual valuation arrangement.

SMSF Investment Strategy Maintenance : Review and update where circumstances or markets have shifted.

2025/26 Contribution Caps :
Concessional cap: $30,000.
Non-Concessional cap: $120,000.

NCC bring-forward (under age 75) : up to $360,000 over 3 years where TSB at 30 June 2025 was under $1.76m; $240,000 over 2 years where TSB was $1.76m–under $1.88m; $120,000 single year where TSB was $1.88munder $2m; nil where TSB is $2m or more.

Concessional Carry-Forward : unused concessional cap from the previous 5 years is available where TSB at 30 June 2025 was under $500,000. The unused 2020/21 cap ($25,000) EXPIRES on 30 June 2026 – use it or lose it.

Contributions must be RECEIVED by the fund by 30 June 2026 – pay early. Heads-up for 2026/27 : From 1 July 2026, the concessional cap is set to rise to $32,500 and the NCC cap to $130,000 (indexed).

Div 293 Tax on High Earners : Additional 15% tax on concessional contributions where Division 293 income plus super contributions exceed $250,000.

Document Personal Super Deductions : Lodge a valid No ce of Intent to Claim with your fund and obtain acknowledgement before lodging your individual return, commencing a pension, taking a lump sum payment or rolling over your benefits to a new superfund.

DIVISION 296 – The New $3m Super Tax (Now Law)

The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 received Royal Assent on 13 March

2026. The new Div 296 tax (also called "Better Targeted Super Concessions") applies from 1 July 2026 – meaning the first

assessments will be issued based on TSB and earnings for the 2026-27 financial year.

Key features

An additional 15% tax on the proportion of earnings attributable to a member's TSB above the Large Super Balance Threshold (LSBT) of $3 million.

A further 10% tax (so 25% in total Div 296 tax) on the proportion of earnings above the Very Large Super Balance Threshold (VLSBT) of $10 million.

Combined with the 15% fund-level tax, total nominal tax on earnings can reach 30% between $3m–$10m and 40% above $10m.

Both thresholds are INDEXED to CPI ($150,000 increments for the $3m, $500,000 for the $10m).

Earnings are calculated on a REALISED basis (the controversial "unrealised gains" approach has been removed).

Negative earnings years: no refund, no carry-forward of Div 296 losses (although fund-level losses still carry forward inside the fund).

Tax is assessed to the individual (not the fund) – the ATO will issue an assessment and a release authority similar to Div 293.

On death, the deceased's TSB is reset to nil to prevent a posthumous liability; members dying on or before 30 June 2027 will have no Div 296 liability in 2026-27.

Pre-30 June 2026 Considerations

Get an accurate TSB picture NOW : Identify all members likely to exceed the $3m LSBT at 30 June 2026 – this is the first measurement point for 2026-27. Don't forget overseas pension interests are excluded from TSB under the new rules.

Refresh valuations : SMSFs holding property, unlisted units or private company shares should obtain current, supportable valuations as at 30 June 2026 – the ATO has signalled increased scrutiny where valuations sit static for 3 or more years.

Consider withdrawals before 30 June 2026 : Members aged 60+ who have met a condi on of release and have TSBs near $3m may wish to lump-sum draw down balances before 30 June 2026 to reduce TSB below the LSBT. (Note: recontribution restrictions and pension recalculation traps must be considered.)

Equalisation between spouses : Consider contribution splittng and re-contribution strategies to even up balances and keep each spouse below $3m. Remember NCC bring-forward rules use 30 June 2025 TSB.

Estate planning : Review BDBNs, reversionary pensions, and ownership of large unlisted holdings. The new rules change how death benefits and TSB interact.

Cashflow planning : For members holding illiquid SMSF assets (e.g. property, unlisted investments), model whether the fund will have liquidity to meet a Div 296 release authority – consider liquidity strategies, debt repayment ming, or asset repositioning before the 2026-27 year starts.

Optional CGT cost-base reset : The legislation includes optional cost-base reset provisions that may be relevant for members with significant embedded unrealised gains. Talk to us about whether to elect. Post-30 June 2026 (i.e. during 2026-27 and beyond)

Watch for ATO "in-scope" notifications : The ATO will notify trustees of in-scope members. Funds must then calculate and report attributable realised earnings to the ATO.

Member-level attribution : We will work with fund administrators to ensure earnings are attributed on a fair and reasonable basis consistent with the (forthcoming) regulations.

Pay personally or from super : Members can elect to pay the Div 296 tax personally or via a release authority from their super fund – the right answer depends on personal marginal tax rates, fund liquidity, and pension stage.

Ongoing strategic review : Because thresholds are indexed but earnings are taxed annually, ongoing review of withdrawal, contribution and structuring strategies is essential. Super is no longer a "set and forget" structure for highbalance members.

ACCOUNTING & DOCUMENT MANAGEMENT

Ensure your data is up to date for year-end planning. Modern cloud-based accounting (Xero), portfolio tracking

(Sharesight) and document management (Hubdoc) make it straigh orward to maintain real-me records — a major

advantage in navigating financial year-end and opmising your tax position.

NEW ADMINISTRATION REQUIREMENTS

AML/CTF Tranche 2 for Accountants and Lawyers from 1 July 2026

From 1 July 2026, accountants, tax agents, bookkeepers, lawyers, and real estate agents will become repor ng en es

under the An-Money Laundering and Counter-Terrorism Financing (AML/CTF)Act.

What this means :

Customer due diligence (iden ty verifica on, source of funds)
Ongoing monitoring of client transac ons
Suspicious matter reporting to AUSTRAC
Record-keeping (7 years minimum)
AML/CTF program (risk assessment, training, compliance officer)

Relevance : Nearly all accounting firms will be dragged into this due to basic func ons they ordinarily perform such as

corporate registered office, trust and company services, and assistance with client transactions. This is a lot of unpaid

administration work for the government to help them identify the type of clients and transactions we would never deal with.

Impacts : We are taking all the steps we can to minimise cost and inconvenience to our clients of these requirements. We

have engaged automated systems and digital ID/KYC tools however there will be some changes in the experience in dealing

with us such as:

Updates to engagement letters
Requests for ID, source of funds, and entity details
Verification across directors, beneficiaries, trustees, etc.
Delays before work can start
Higher administrative costs that will need to be passed on

TASA (Tax Agent Services Act 2009) reform – Breach Reporting

Where registered tax agents and BAS agents have reasonable grounds to believe there has been a “significant breach” of the

Code of Professional Conduct (by them or another registered practioner), they must notify the Tax Practioners Board

(TPB). This applies to breaches occurring on or a er 1 July 2024.

This includes where significant client non-compliance with a tax law or ATO guidance puts the practioner or another

practioner at risk of breaching Code obligations (e.g. taking reasonable care in ascertaining the client’s state of affairs, or

other Code requirements).

Impact : To some extent these requirements force tax agents to become unpaid police for the tax system. Agents will protect

themselves by doing more due diligence before taking on clients to ensure they have no unresolved compliance issues, and

by dumping clients who don’t follow recommendations.

COMMENT : Regulation like this sees businesses doing unpaid government regulatory work. This is another reason

treasury’s current narrative of trying to equalise tax outcomes of businesses with those of employed workers is

misguided.

ATO RULINGS AND RECENT CASE LAW

ATO RULINGS

Holiday House Ruling - Old Leisure Facilities Sec on Weaponised

Repurposing old “leisure facility” rules : The ATO has finalised its controversial new ruling on holiday house rental deductions.

Under TR 2026/1, the ATO classifies a privately used rental holiday house as a ‘leisure facility’ (an older concept originally

aimed at recreational assets of businesses) if personal or family recreational use is significant. This new interpretation allows

the ATO to invoke sec on 26-50 of the Income Tax Assessment Act 1997, which denies major rental property deductions (like

interest, rates, land tax, maintenance costs) for holiday homes that aren’t predominantly used to generate rental income year

round. This marks a major change from past practice – previously the ATO typically allowed holiday-home expenses with

proportional (time-based) apportionment without invoking sec on 26-50. The ATO acknowledges it had not publicly applied

sec on 26-50 to holiday rentals before and has introduced a one-off transitional concession (no audits on pre-1 July 2026

expenses).

The problem : If a property is deemed mainly a “leisure facility” (meaning private recreational use outweighs or undermines

the rental purpose), all the typical holding/ownership deductions (interest, rates, land tax, insurance, repairs, depreciation,

etc.) can be completely disallowed – not merely reduced – regardless of part-year rental.

Legal Validity : In justifying the new approach, the ATO relies on case law to interpret “mainly” as a qualitative test (focusing

on the property’s dominant purpose and availability) rather than a strict >50% time test. Critics note that the ATO’s heavy

emphasis on peak holiday-season usage (e.g. if owners block out Christmas or similar high-demand periods for personal stays)

goes beyond what the statute’s wording clearly demands.

What to do : Consider the following steps to counter the new ATO position as opposed to challenging it:

Limitation of personal stays, especially in peak seasons
Keeping the property genuinely available and rented out during high-demand periods
Document rental efforts and usage
Avoid aggressive workarounds such as contrived stays or charges

Impacts :

There are numerous issues now (including high Land Tax) that potentially de-value holiday houses
This is yet another tax grab.

CASE LAW

Bendel Case: ATO Loses in The High Court - The Impact Is Bittersweet Though

Decision : The High Court dismissed the ATO's appeal in Commissioner of Taxation v Bendel [2026] HCA 18, confirming that a

trust's unpaid present entitlement (UPE) to a company is not a "loan" for Division 7A purposes

Background : For years, the ATO treated UPEs as "loans" under Division 7A, requiring loan agreements and minimum

repayments.

Impact : Bendel is a welcome reprieve from the ATO making up the law, but it does not remove the need to manage UPEs,

Division 7A exposure, Subdivision EA and trust distributions carefully. Unfortunately, the ATO has Subdivision EA waiting in the

wings. That provision targets UPEs directly, is even nastier than Division 7A and applies retrospectively. Large assessments can

easily be triggered by seemingly innocent actions without the trustees being aware. The real loser is the taxpayer: Division 7A

remains a sinister, complex trap in desperate need of reform.

Actions: The dangers arise when there exist unpaid trust distributions to company beneficiaries:

Review historical UPEs and any Division 7A loan arrangements that follow previous ATO guidelines
Monitor ATO guidance and any legislative response
Avoid future problems by physically paying out any historical or current unpaid distributions

Botella Case: Hardwired Company Division 7A Loan Agreements Don’t Work

Decision : The Administrative Review Tribunal confirmed in Botella that puttng Division 7A loan terms into a company

constitution does not of itself satisfy Division 7A.

Background : Many companies have constitutions stating: "If Division 7A applies, loan terms written into the constitution

apply". This was a practical solution to avoid paperwork for every shareholder loan. Many companies have relied on this.

Division 7A was designed to be punitive and not practical so companies can be at risk if they don’t have each loan in writting

separate from the wording of the constitution.

Actions : Whilst it would be quite nasty for the ATO to pursue this in cases where companies have complied with Division 7a

loan terms, nothing is a surprise these days. Most companies have separate “facility agreements” in place covering any

drawings by specific borrowers. One agreement can cover multiple advances, or an “amalgamated loan” provided it is properly

drawn up and executed prior to the company’s lodgement day for the income year in which the first loan was made.

Review all private company loans to related parties to check if they are properly documented

ATO AUDIT FOCUS AREAS

What the ATO is targeting this year – and what it means for you. Drawn from the latest ATO publications, NTAA technical

updates, and recent Tribunal and Federal Court decisions.

The ATO received an additional ~$870 million of compliance funding in the 2025/26 Budget and has moved into an

aggressive audit phase. The following are the key areas being targeted this year – we summarise what each means for you in

one or two lines.

Focus Areas Affecting Individuals

ATO interest charges (GIC & SIC) no longer deductible : From 1 July 2025, General and Shor all Interest Charges are NOT tax-deductible — even where they relate to prior-year debts. The after-tax cost of carrying an ATO debt has effectively doubled, so paying tax debts down (or refinancing them via a bank loan if you carry on business) is now a priority. WARNING: personal taxpayers, employees and passive investors CANNOT deduct interest on a loan used to refinance an ATO debt — only operating businesses can.

Car logbook claims : The ATO has flagged a high error rate in logbook-method car expense claims and has won multiple Tribunal cases. Logbooks must be a current 12-week period within the last 5 years, properly describe each business journey ("client visit" is NOT enough), and the business-use percentage must reflect actual annual patterns – not just the busiest 12 weeks.

Rental property interest claims : Continues to be a top ATO audit target – special attention to redraw facilities, refinanced loans partly used for private purposes, and the vacant land rules during construction or substantial renovation. TIP: use OFFSET accounts (not redraw) where possible — offset withdrawals don't taint deductibility.

Personal super contribution deductions – Notice of Intent traps : The ATO has NO discretion to waive a late or invalid Notice of Intent. The notice must be lodged BEFORE you lodge your return (or 30 June of the next year, whichever is earlier), AND before you start a pension, AND before any rollover or lump sum withdrawal of the contributed amount. Get this wrong and the full deduction is lost.Focus Areas Affecting Businesses, Trusts & Companies

GST reporting on BAS : The ATO is closing an $8.7 billion GST gap (small business contributes 70%). Focus on misclassified taxable sales (e.g. "going concern" errors), over-claimed input tax credits, late lodgers, and businesses that should be registered but aren't. Non-compliant businesses are being moved from quarterly to MONTHLY BAS reporting.

Cash businesses & the shadow economy : Hospitality, building & construction, agriculture and labour hire are under direct surveillance through joint ATO/Fair Work raids. Recent cases (Ahmad, Endycott , Day) show the courts almost always uphold default assessments unless your records are detailed, contemporaneous and credible.

Property developments (TA 2026/1 and PCG 2026/D2) : The ATO is targeting "long-term construction" arrangements where related-party developers defer income recognition while claiming deductions and GST credits during the build. If you are mid-project, get advice – these are now flagged as "red zone" risk.

Sham contracting & TPRS data-matching : Joint ATO/Fair Work opera on announced 13 March 2026. If you engage workers as contractors (especially in building & construction or road freight), expect the relationship to be tested. Misclassification triggers SG charge, PAYG withholding, leave entitlements AND Fair Work penal es of up to $495,000.

Contractor expense ratios on tax returns : High contractor expenses relative to salaries and wages on the company / trust return is a key data-matching trigger.

Lifestyle asset lease expenses (boats, aircrafts, luxury cars) : Lease deductions for these assets are reviewed for both FBT and deductibility. The ATO also matches insurance data on high-value lifestyle assets to detect private use.

Motor vehicle expenses & the FBT gap : The FBT gap on car benefits is estimated at 30%. Employers claiming car expenses on the business return without a corresponding FBT return are a priority audit target.

Base Rate Entity (BRE) status : Claiming the 25% rate when income from rent, interest, dividends or hiring equipment exceeds 80% of assessable income is being scrutinised. Watch in particular: companies leasing equipment (royal es under s.6(1)) and bucket companies receiving trust distributions sourced from passive income.

Bad debt deductions : Must be evidenced as actually bad (not merely doubtful), formally written off by 30 June 2026, and previously brought to account as assessable income. A contemporaneous written record (e.g. directors' minute) is essential.

Division 7A – loans, journal entries & complying agreements : Recent cases (Bendel, Botella) confirm the ATO's heightened focus. Loan agreements MUST be standalone written agreements between the company and the borrower – clauses buried in a company's cons tu on are NOT enough (Botella case). Minimum yearly repayments must reach the company by 30 June 2026. "Loan recycling" (redrawing similar amounts a er a repayment) is being attacked under s.109R. Journalised set-offs against declared dividends or director fees can work BUT all steps must be executed by 30 June.

Trust distributions & s.100A (reimbursement agreement risk) : Beneficiaries must genuinely receive and control the economic benefit. Circular funding, distributions where the beneficiary never gets the cash, and "late minutes" remain firmly in the ATO's sights.

Family Trust Elections (FTEs) & Family Trust Distribution Tax (FTDT) : The ATO has confirmed unlimited me to raise an FTDT assessment at 47% – distributions outside the family group can sit undetected for years. NOTE: the ATO is offering up to 80% remission of accumulated GIC on voluntarily self-reported FTDT — but ONLY UNTIL 31 December 2026.

Written agreements for related-party transactions (SNA case) : The Full Federal Court has confirmed that longstanding practice, commercial logic and even cash payments are NOT enough where there is no current, binding written contract. Service, licence and lease agreements within private groups should be reviewed and refreshed.

Income splitting and PSI (PCG 2025/5) : Professional firms and personal-services businesses streaming profits to family members or low-tax entities are being challenged under Part IVA — qualifying as a PSB does NOT immunise you.

Holding-period rule for new bucket companies : If a non-widely-held trust receives franked dividends and then distributes them to a corporate beneficiary that was incorporated AFTER the trust received the dividends, the company will NOT satisfy the 45-day holding rule – franking credits are lost.

Franking rate (25% vs 30%) mismatch : Newly incorporated bucket companies, and companies whose income mix has changed, are commonly attaching franking credits at the wrong rate. Mismatch can trigger franking deficit tax.

What This Means for Year-End 2025/26

The unifying theme across all these areas is governance over engineering – the ATO is no longer satisfied with structures or labels, they want to see commercially supportable substance, contemporaneous documentation, and consistent cash flows.

Many issues arise not from aggressive planning but from legacy arrangements that no longer reflect how the business actually operates.

Complete by 30 June 2026 (not after) : logbooks, Notices of Intent, Division 7A minimum repayments, bad-debt write-offs and trustee resolutions.

Refresh related-party written agreements (service, licence, lease) where these have expired or never existed.

Review FTE / family group exposure NOW – the 80% GIC remission window closes 31 December 2026.

Document trustee distribution decisions and cash flows in real time , not retrospectively.

Pay or refinance outstanding ATO debt – it is no longer deductible.

2026/27 Overview and Budget Review

Tue, 30 Jun 2026 07:41:33 GMT

2026/27 Budget Overview

This year the federal government has orchestrated four fundamental structural changes to Australia's taxation of private wealth, investment, and retirement savings. All four are contrary to previous assurances. For professionals, family businesses, investors, and retirees, the combined impact is substantial. There will be higher effective tax rates, significantly increased compliance costs, unavoidable restructuring costs, and years of legislative and administrative uncertainty.

The introduction of “Division 296” new additional taxes on superannuation earnings attributable to balances above $3 million and $10 million is now law and takes effect on 1 July 2026. The new 30% minimum tax on trusts, negative gearing restrictions, and capital gains tax changes announced in the 2026/27 Federal Budget are mostly up in the air at present. Some framework legislation for CGT and negative gearing policies was rushed through the lower house and has now been whitewashed via a senate “review”. There is a lot for taxpayers to consider and many unknowns.

Separately, the ATO has continued intensified compliance scrutiny across family trusts, companies and Division 7A, holiday houses, and SMSFs. Compliance expectations for ordinary family dealings have risen sharply, with Treasury and the ATO purposefully imposing, and then leveraging increased complexity to trap ordinary businesses and family groups with disproportionate penalties to raise additional revenue.

Whilst there is a desperate need for tax reform, recent policy changes are primarily revenue grabs. They have not been well thought through, and there has certainly been little real consultation on them. The number of apparently unanticipated problems identified with these measures is still growing. It is misleading to label this as “reform” because none of the underlying problems with the tax system are being addressed, especially its well documented overreliance on taxes on “income”. Continuing to tinker with outdated tax frameworks just translates into more complexity and inequity, neither of which Treasury has any concern about from within their protected bubble. Government continues to load up businesses and family groups up with complexity, compliance and risk though at the same time are perplexed by an ongoing decline in economic productivity.

The government’s broader ideological policy settings are gradually starving the economy of most key productive inputs. We are deprived of cheap and reliable energy, a productive workforce, and effective and simple taxes and regulations. Now, courtesy of the 2026/27 Budget, we are looking to be starved of aspiration, enterprise and investment. Economic productivity is at an all-time low, and headline economic growth is being held barely positive by unsustainable levels of immigration. The only savior could be artificial intelligence, though there are numerous risks with that and no coherent policy.

Please excuse this negativity but it must be expressed. As always, our aim is to provide understandable insight to assist you with practical solutions. If you have any queries or concerns, please contact us.

What's New

2026/27 Federal Budget – Increased Taxation and Complexity Under a False Narrative

30% Minimum Tax on Discretionary Trusts (Draft Legislation Expected Late 2026)

What it does:

From 1 July 2028, trustees of discretionary trusts will be required to pay a 30% minimum tax on the trust's taxable income. Beneficiaries will still include their distribution in their assessable income but will receive a non refundable tax credit for the trustee's 30% payment. Corporate beneficiaries will receive no credit, creating effective double taxation.

STOP PRESS: New Announcement 18/6/26 - “Income from all types of testamentary trusts will be exempt from the minimum tax, including future discretionary testamentary trusts, with implementation details included in further consultation.” Warning: Treasury will continue its focus on restricting trust structures. Expect plenty of tricks, traps and complexity in the detail when it is eventually known.

Impacts of Trust Changes:

❌ Income splitting amongst low tax rate beneficiaries after 30th June 2028 will be Neutralised

❌ Tax effectiveness of post-budget testamentary discretionary trusts (TDTs) – Still be wary here!

❌ Corporate beneficiary distributions after 30th June 2028 result in total tax up to 69.71%

❌ Trust-to-trust loss planning likely neutralised because the 30% credit is non-refundable

❌ Trust distributions to charities will no longer be tax effective – Unforeseen issue. This may change

❌ Annual trust distribution planning becomes even more complex (if that is possible!)

❌ Compliance costs and risks for family groups will unavoidably increase on numerous fronts

❌ Trusts (other than TDTs) will remain viable only as a high-cost asset protection vehicle

❌ Costly restructuring may be the best option for some families and businesses

Asset protection options will need to be reviewed – Binding Financial Agreements could assist
Combined Budget measures will require review of most businesses and family groups
Restructuring concessions (when known) may assist but many costs won’t be covered

! Low-income beneficiary distributions potentially waste the 30% tax non-refundable credits

! Company restructures can introduce Division 7A, franking credit, and payroll tax risks

! Earnings retained / re-invested in companies are arguably at high risk of franking policy changes

! Asset protection can easily compromise CGT Small Business Concessions in restructures

! Do not act prematurely on these measures - wait for legislation and proper detail

Wages to family members may assist but watch “on costs”, administration, and ATO S 26.35 discretion
Dividend Access Shares could provide distribution flexibility but there are tax policy risks!
Superannuation is starting to look a whole lot better as a structure despite new Div 296 taxes
Family investment companies may have merits - subject to high risk of imputation policy change
TDTs in operation pre-Budget may be gold – STOP PRESS: await detail emerging from 18/6/26 backflip

Action:

Check if TDT wills have an option to bypass any TDT if determined un-viable by executors at the time
Start thinking about the impact of the Budget on your circumstances – don’t act yet
Consider simplifying your financial affairs given Treasury’s attitudes to business and family groups
Consider winding up trust structures where possible to avoid ever increasing risks they now attract

Key warning!! : Treasury and government are no longer able to disguise their contempt for hard working small business and family groups, and their inability to design and execute real tax reform. In the absence of proper reform, complexity is itself a tax with no benefit to the community. Because there is no real tax reform, there will be no respite for traditional business and family investment structures. Simplicity may be your only friend until there is real tax reform.

CGT & Negative Gearing Changes – Pulling Up the Ladder

What it does:

CGT discount replaced with CPI indexation + 30% minimum tax:

The current 50% CGT discount for assets held more than 12 months will be abolished for individuals, trusts, and partnerships for gains arising after 1 July 2027, including gains on Pre CGT assets. It will be replaced with:

CPI indexation of the cost base (available after 12 months of ownership for tax residents only),
This is combined with A 30% minimum tax on the net capital gain with some groups excepted*
*Certain (unspecified at this point) recipients of means-tested government income support are exempt from the 30% minimum tax and will pay normal rates.
New residential property (undefined) investors may elect to retain the 50% discount method instead of using the new CPI indexation + 30% minimum tax method.

CGT Grandfathering:

Gains accruing before 1 July 2027 on post-CGT assets will continue to receive the 50% discount.
A market valuation at 1 July 2027 or ATO apportionment formula (not yet devised) will be required to determine pre-reform and post-reform gains.
Pre-CGT assets (acquired before 20 September 1985) will become partially taxable: gains accruing after 1 July 2027 will be subject to CGT

Other Carve Outs:

Companies – they never had access to the 50% discount and also won’t have access to indexing.
Superannuation funds – retain 1/3 discount after 12 months. Treasury was too scared to touch super again (for now) after the debacle around imposing new Div 296 taxes!

Update!! – 18 June 2026:

On 18/6/26 The Treasurer had a second attempt at the Budget and has announced some further carve outs for startups and innovation along with a slight change to the very complex CGT Small Business Concessions. For more – see below under “2026/27 Federal Budget – Version 2”.

Negative gearing restricted:

Deductions for losses on established residential properties acquired after 7:30 PM AEST on 12 May 2026 will be quarantined. Losses will be deductible only against:

Rental income from residential properties, and or
Capital gains from residential properties. Excess losses are carried forward indefinitely until death.

Exemptions from negative gearing quarantine:

Residential properties acquired before 7:30 PM AEST on 12 May 2026 (including off-the-plan contracts exchanged but not yet settled).
New residential properties (eligible “new builds” - undefined).
Properties held in superannuation funds and widely held trusts.
Certain build-to-rent and government-partnered housing developments.

Impacts of CGT and Negative Gearing Changes:

It is difficult to know where to start with all the implications. Many have been glossed over or not even on Treasury’s radar:

❌ Most scenarios with growth even moderately above inflation will result in a higher taxable gain

❌ Higher effective CGT rates for self-funded low-income taxpayers (due to minimum 30% tax rate)

❌ Timing of gains to take advantage of years with lower marginal rates is Neutralised

❌ Saving for first homes using growth assets or “rentvesting” will be much less viable unfortunately

❌ The complex and messy First Home Super Saver Scheme (FHSS) up to $50k may be a bit more compelling

❌ Non-residents get no indexing – CGT rules for non-residents have gradually gotten very nasty

❌ Valuations are required for most assets to optomise CGT up to 1 July 2027 – costly and unproductive

❌ Pre-20 Sep 1985(Pre CGT) assets are now subject to CGT after 1 July 2027 – quite unexpected

❌ Generally the tax system more broadly will provide little incentive for hard work, risk, and innovation

❌ Large increase in record keeping and calculation complexity – two histories for every asset and addition

It will be important to know how New Residential Property (”new build”) is to be defined - the following table from the Budget explainer shows likely inclusions in the final definition:

The First Home Super Saver Scheme (FHSS) up to $50k might be worth revisiting

! There will be scope for disputes with ATO on valuations

! Keep state and local taxes in mind for various holding structures – especially Land Tax

Predictions:

Budget measures may actually reduce supply of new residential dwellings
With less supply and less incentive to invest in established property - rents will rise
State governments will intervene to further regulate rents and increase tenants’ rights Increasing tenants’ rights will result in even less investment and less supply
Young people’s access to the market will actually be reduced
Young people will lose interest in saving via stock market investing due to high tax rates
Existing residential property owners may “lock in” to preserve grandfathered tax status
Recent first home buyers may experience negative equity
Main residence is further elevated as preferred asset class – taxation of main residence will follow
Bank of mum and dad flourishes - Increased reliance on intergenerational wealth transfers
Residential property prices will fall overall due to reduction in after tax investment returns
Potential investment bias away from residential housing and growth assets toward yield
The combined Budget policies will trigger a recession. Most of it will eventually need to be dumped

Good Accountants will be hard to find: Accountants and tax agents are being loaded up with extraordinary levels of unpaid government work, complexity, compliance, and risk. At the same time their reputations are being tainted by the big four and incremental erosion of the Chartered Accountants (CAANZ) brand. There will be an exodus from the industry with no new blood attracted due to reputational shifts and false narratives about the impacts of AI.

Action:

Start scoping for advice and market valuations – accountants and valuers will be thin on the ground
Re-evaluate tax effectiveness of holding structures – Super likely now elevated in status
Don’t shoot the messenger

2026/27 Federal Budget – Version 2 (Further versions to come!)

Update – 18 June 2026

⚠ Warning: Due to continuing community dissatisfaction with the Federal Budget handed down on 12th May, the Albanese Government announced changes on 18th July and will continue to announce further hastily devised policy changes to try and reduce political damage. The tax system is already an unsustainable mess, and these announcements will cause further uncertainty and complexity for taxpayers. Because they are politically motivated and without detail, it is certain that the final legislation and guidelines will be complex, restrictive and incorporate new traps for taxpayers. It is becoming very difficult for taxpayers and their advisers to know what to do in this terrible policy environment.

Following is a summary of the latest announcement as extracted from: Tax reform implementation for small business and startups Prime Minister of Australia

Small business CGT relief broadened: The turnover threshold for the existing small business 50% active asset CGT reduction is proposed to increase from $2 million to $10 million, potentially extending eligibility to all 2.7 million active small businesses and 98% of active businesses. COMMENT: Note that three key branches of the complex Small Business CGT Concessions are excluded from the new threshold. Naturally that was glossed over in the press conference and sound bites.

New innovative business concession: Treasury will release a consultation paper on a proposed Innovative

Business CGT Concession, intended to provide a 50% CGT discount to early-stage investors, founders and

employee share scheme participants in innovative start-up businesses. COMMENT: Ongoing uncertainty

and unnecessary complexity to patch up a poorly prepared and implemented Budget

Testamentary trusts confirmed exempt: The Government has confirmed that income from all types of

testamentary trusts will be exempt from the proposed minimum tax, including future discretionary

testamentary trusts, with implementation details to be addressed through further consultation.

COMMENT: This is a complete backflip. Treasury has been caught out on its nasty intentions which remain.

Watch for sneaky “integrity” provisions and guidelines making testamentary trusts even more difficult to

operate

More detail to be legislated: The Government has also confirmed that amendments will be made in the

Senate rather than left to legislative instruments, which should provide greater certainty on key

implementation details. COMMENT: Caught again! The government has backed down on the extent of

ministerial discretion given to the Treasurer to make up these rules as he goes. “Now that’s a good thing!”

FINAL COMMENT:

The initially stated objectives of the Budget were reasonable and adjustment of housing

settings necessary. This could have been easily done by tinkering with the levels of CGT Discount. There could

even be different discount percentages depending on period of ownership or asset type. That would have been

so simple. Instead, we get a complex mess which without doubt will have to be unwound, with the unwinding

creating even more disruption. We are well on the road to recession with policies like these.

Other Budget Measures

Individual Tax Rates (2026–27 to 2027–28)

New Working Australians Tax Offset ($250) – From 2028 Income Year

This is an un-indexed non-refundable tax offset that will apply automa cally through the tax system. It reduces tax

payable solely on income earned from work (wages, salary, or sole-trader income).

Impact:

A very modest handout considering ongoing impacts of inflation on and bracket creep – at least it’s not complex!

$1,000 Standard Deduction for Work-Related Expenses – From 2026-27

This was combined with the CGT and Negative Gearing changes so they could be rushed through. The bill is not yet

law but is likely to pass. Resident taxpayers deriving assessable labour (Labor?) income can claim up to $1000 against

that income. Apparently, this amount can be optionally claimed regardless of the actual level of expenses incurred!

Excluded from the deduction on are Sole Traders, Independent Contractors, individuals engaged under labour hire, and

individuals with Personal Services Income. Where work expenses are above $1000 taxpayers have the op on of

claiming under normal substantiation requirements.

Impact:

The appearance of free money in the form of an increased refund – a handy vote buyer
Will kill off some nuisance record keeping for many workers
This change has a sneaky lesser known FBT increase attached which is very anti small business (see below)
For many professionals and tradespeople, actual expenses will exceed $1,000 so no benefit

⚠WARNING: FBT "Otherwise Deductible" and Work Items Exemptions Removed

Buried in the draft legislation on for the $1,000 standard deduction is a potentially very nasty sting for small businesses

and their employees. This has been spun as necessary to prevent double dipping on expenses covered by the $1000

standard deduction. In reality, it has a far greater impact on taxpayers who would not normally benefit from the

$1000 concession. COMMENT: This lesser known change applies to reimbursements, employer-paid expenses, and

salary-packaged expenses. It will prove to be very costly and disruptive to small businesses and their employees.

Current treatment: If an employer provides or reimburses a work-related expense (e.g. work related travel or self

education expenses), and the employee would have been entitled to claim a tax deduction if they had paid for it

themselves, the employer can apply the “otherwise deductible rule” to reduce the taxable value of the benefit—

often to zero—so no FBT is payable. It is convenient and can be advantageous if GST credits are available. Also,

certain work-related items (such as laptops, phones and tools of trade) given to employees may be fully exempt

from FBT under a specific exemption on where they are primarily used for work purposes. The employer can also claim

GST on these items where applicable where the employee cannot. Certain expenses excluded from being covered

by the standard deduction on included income protection, personal sickness and accident insurance premiums, along

with payments for membership of a union or other trade, business or professional association.

New treatment: WARNING – Salary Packaging FBT Trap: Under the proposed rules, both The “otherwise

deductible rule” and The FBT exemption on for work-related items (e.g. laptops, phones, tools of trade) are effectively

removed for salary packaged benefits:

These are the categories:

WARNING: The potential impact of these very anti-business changes is:

! The employer faces an FBT Liability on the grossed GST inclusive up value at a rate of 47%

! Salary Packages and employee related expenses will have to be renegotiated.

While the proposed rules significantly impact salary packaged benefits, there remains scope for employers to fund work-related costs directly. The key distinction is that the expense must be employer-driven and not provided in exchange for reduced salary—otherwise it risks being treated as salary packaging and subject to FBT. This has created a big mess for businesses to sort out.

Private Health Insurance Rebate: Age-Based Uplift Removed

From 1 April 2027, the Government will phase out the age-based uplift of the Private Health Insurance (PHI) rebate

for Australians aged 65 and over.

Removing the age-based uplift cuts the PHI rebate for over-65s by 4–8 percentage points, increasing premiums

by hundreds to over $1,000 per year for many—shifting a significant share of health insurance costs onto retirees.

FBT Concession for Electric Cars: Chris Bowen’s Net Zero Gravy Train Slows Down

The generous 100% FBT exempt on for certain electric vehicles will be phased out from 1 April 2027.

Current concession (un l 31 March 2027):

100% FBT exemption on for eligible EVs (battery electric, hydrogen fuel cell, PHEVs)
Applies where the vehicle price is below the luxury car tax threshold ($91,000 for 2026)

New rules (from 1 April 2027 – for new / changed arrangements):

EVs under $75,000 → 25% FBT discount (FBT on 75% of value)
$75,000 to luxury car threshold → Full FBT (no exemption)
Above threshold → Full FBT

Final phase (from 1 April 2029):

• All EVs: 25% FBT discount, regardless of price (capped at luxury car threshold)

This has been a very generous concession. The planning opportunity here is packaging eligible vehicles before 1 April 2027
For higher-value EVs above the luxury car tax threshold, the period from 1 April 2027 to 31 March 2029 is the least favourable, with full FBT applying.
From 1 April 2029, a partial concession returns (25% discount), but this is still materially less generous than the current full exemption available for qualifying vehicles entered into before April 2027.

SMALL BUSINESS MEASURES IN THE BUDGET – MORE POLITICAL THEATRE!

$20,000 Instant Asset Write-Off – Permanently Extended (for now)

Small businesses with turnover under $10 million can immediately deduct assets cos ng less than $20,000 (GST

exclusive, per asset). This applies for the 2026 Financial Year but will now be made permanent.

Instant asset write offs are used as a political tool without any genuine regard for small business
Many people don’t realise that it is simply a tax deferral similar to accelerated depreciation on claims
These write offs can reverse nastily when the asset is sold – Covid limits up to $150k have caused later problems
Always worth taking advantage of especially around year end. For details: Instant asset write-off ATO

Company Loss Carry-Back Reintroduced – There Are Important Limitations

For tax years commencing on or a er 1 July 2026, companies will be able to carry back a tax loss and offset it against

tax paid up to two years earlier.

Note: The refundable amount is capped by prior tax paid and the company’s franking account balance – meaning

businesses that have not retained profits or tax paid (franking balance) in prior years will receive li le or no benefit.

This will be relatively automatic to claim where available from the 2027 tax year onward

COMMENT ON BUSINESS MEASURES: The small business sector makes up of 97% of all businesses, employs millions of Australians and contributes around one-third of GDP. These businesses are built by proprietors who take real financial risks, work long hours, and shoulder a disproportionate share of administrative and compliance obligations — often effectively acting as unpaid intermediaries for government systems and employee obligations. Proprietors of these businesses work hard, take many risks, and do a lot of administration work for the government and their employees for free. The policy approach toward them is patronising to say the least. What we get are carefully designed, tightly constrained measures that create positive headlines but deliver limited, and sometimes illusory, practical benefit for a large portion of the sector.

“Claytons” Loss Refundability for Small Startups

For tax years commencing on or after 1 July 2028, start-up companies with aggregated annual turnover of less than

$10 million that generate a tax loss in their first two years of opera on will be able to utilise the loss to generate a

refundable tax offset.

Important limitation: The offset will be limited to the value of fringe benefits tax and withholding tax on wages paid

in respect of Australian employees in the loss year.

This smells of creating the appearance of doing something (especially given the deferred start date)
Real startups rarely pay founders wages or fringe benefits in early years so this is fake

Research and Development (R&D) Tax Incentives Adjusted from 1 July 2028

The Government is reshaping the R&D tax incentive from 1 July 2028, with the aim of making it more generous for

genuine “core” R&D activities, while enlightening rules around what qualifies.

For businesses involved in problem-solving, experimenta on, or developing something new (products, processes, so ware, systems), R&D Incen ves should be kept on the radar.

COMMENT ON BUSINESS MEASURES: The small business sector makes up of 97% of all businesses, employs

millions of Australians and contributes around one-third of GDP. These businesses are built by proprietors who

take real financial risks, work long hours, and shoulder a disproportionate share of administrative and compliance

obligations — often effectively acting as unpaid intermediaries for government systems and employee

obligations. Proprietors of these businesses work hard, take many risks, and do a lot of administration work for

the government and their employees for free. The policy approach toward them is patronising to say the least.

What we get are carefully designed, tightly constrained measures that create positive headlines but deliver

limited, and sometimes illusory, practical benefit for a large portion of the sector.

Disclaimers

Financial Product Advice

Nothing in this advice is intended as ‘financial product advice’ as defined by the Corporations Act (as amended by the Financial

Services Reform Act 2001). We are not licensed to provide ‘financial product advice’ which includes recommendations regarding

contribution to or withdrawal from, or specific investments within a particular superannuation fund (including a Self-Managed

Superannuation Fund). You should consider if it is in your interests seeking advice from an Australian Financial Services Licensee

before making decisions in relation to a financial product.

Currency of Income Tax Advice

Any taxation advice included in this correspondence is current to the date of writing. Taxation laws in Australia are complex

and constantly changing. The government often changes rules effective from the date announced and, in some cases,

retrospectively. If there is any delay in the use of this advice you should consider having it refreshed.

Quality of information

Before relying on the information on this newsletter, users should carefully evaluate its accuracy, currency, completeness, and

relevance for their purposes, and should obtain professional advice relevant to their particular circumstances. We and

associated parties cannot guarantee nor assume any legal liability or responsibility for the accuracy, currency or completeness

of the information or material.

Links to external websites

This newsletter may contain links to other websites which are external to our newsletter and website. It is the responsibility of

the user to make their own decisions about the accuracy, currency, reliability, and correctness of information contained in linked

external websites.

Linkage to external websites should not be taken to be an endorsement or a recommendation of any third-party products or

services offered by virtue of any information, material or content linked from or to this website. Users of links provided by this

website are responsible for being aware of which organisation is represented or providing the information or material on the

website they visit.

Views or recommendations provided in linked websites do not necessarily reflect our views or recommendations, nor the views

or recommendations of associated parties.

Security of our website

Users of our website should be aware that the World Wide Web is an insecure public network that gives rise to a potential risk

that a user's transactions are being viewed, intercepted, or modified by third parties or that files which the user downloads may

contain computer viruses or other defects.

We and associated parties accept no liability for any interference with or damage to a user's computer system, software or data

occurring in connection with this website. Users are encouraged to take appropriate and adequate precautions to ensure that

whatever is selected from this website is free of viruses or other contamination that may interfere with or damage the user's

computer system, software, or data.

Liability limitation

Liability limited by a scheme approved under Professional Standards Legislation. Confidentiality Notice: The contents of this e

mail and any attachments are confidential. It must not be used, distributed, copied or read by any person other than the

addressee. If this transmission has been received by any person other than the addressee please return to us

immediately. Unauthorised use, disclosure, copying or reliance on the contents or attachments of this e-mail by anyone

other than the named addressee may be unlawful

chancellors

Federal Budget Trust Changes

Discretionary Trust Changes — 30% Minimum Tax

2026/27 Federal Budget CGT and Negative Gearing Changes

CGT & Negative Gearing Changes — Investment Implications

Div 296 - New Superannuation Tax

Division 296 — What It Means for Large Super Balances

2026 Financial Year End Overview

2026 Budget & Structural Tax Changes - What Matters (Year End Overview)

ATO Compliance Trends & Risk 2026

ATO Compliance Trends & Risk 2026 — What Matters Now

Division 296 - The New $3m Super Tax Explained

From 1 July 2026, an extra tax applies to super balances above $3 million. Here is what it means in plain English, when it pays to act, and where the traps lie — including how the 2026/27 Federal Budget changes the case for leaving super behind.

1. The Basics in 60 Seconds

2. What Does It Do to Total Tax on Fund Income & Gains?

3. How Does It Compare to Personal Marginal Rates and Other Structures?

What this comparison really tells us

4. Should I Increase or Reduce My Super Balance?

Scenario-based pointers

5. Is It Worth Withdrawing and Investing Elsewhere?

6. The 2026/27 Federal Budget – What it Means for the "Take it Out of Super" Decision

Putting it together – should you still consider exiting super?

1. Estate Administration – A Signiﬁcant New Problem

Next Steps – What to Do Before 30 June 2027

Disclaimers

2026 Year End Housekeeping & ATO Focus Areas

INDIVIDUALS

BUSINESS

﻿

Payday Super Starts 1 July

CAPITAL GAINS AND LOSSES

TRUSTS

COMPANIES

SUPERANNUATION – Pre & Post 30 June Considerations

DIVISION 296 – The New $3m Super Tax (Now Law)

Pre-30 June 2026 Considerations

ACCOUNTING & DOCUMENT MANAGEMENT

NEW ADMINISTRATION REQUIREMENTS

AML/CTF Tranche 2 for Accountants and Lawyers from 1 July 2026

TASA (Tax Agent Services Act 2009) reform – Breach Reporting

ATO RULINGS AND RECENT CASE LAW

ATO RULINGS

CASE LAW

ATO AUDIT FOCUS AREAS

What This Means for Year-End 2025/26

2026/27 Overview and Budget Review

2026/27 Budget Overview

What's New

2026/27 Federal Budget – Increased Taxation and Complexity Under a False Narrative

30% Minimum Tax on Discretionary Trusts (Draft Legislation Expected Late 2026)

What it does:

Impacts of Trust Changes:

CGT & Negative Gearing Changes – Pulling Up the Ladder

What it does:

CGT discount replaced with CPI indexation + 30% minimum tax:

CGT Grandfathering:

Other Carve Outs:

Update!! – 18 June 2026:

Negative gearing restricted:

Exemptions from negative gearing quarantine:

Impacts of CGT and Negative Gearing Changes:

Predictions:

Action:

2026/27 Federal Budget – Version 2 (Further versions to come!)

Update – 18 June 2026

FINAL COMMENT:

Other Budget Measures

Individual Tax Rates (2026–27 to 2027–28)

New Working Australians Tax Offset ($250) – From 2028 Income Year

Impact:

$1,000 Standard Deduction for Work-Related Expenses – From 2026-27

Impact:

⚠WARNING: FBT "Otherwise Deductible" and Work Items Exemptions Removed

Private Health Insurance Rebate: Age-Based Uplift Removed

FBT Concession for Electric Cars: Chris Bowen’s Net Zero Gravy Train Slows Down

SMALL BUSINESS MEASURES IN THE BUDGET – MORE POLITICAL THEATRE!

$20,000 Instant Asset Write-Off – Permanently Extended (for now)

Company Loss Carry-Back Reintroduced – There Are Important Limitations

“Claytons” Loss Refundability for Small Startups

Research and Development (R&D) Tax Incentives Adjusted from 1 July 2028