7 July 2025 to 11 July 2025
Weekly Bulletin Contents
TAX
Monday7 July 2025
Tax Ombudsman to review ATO’s approach to GIC and management of debt
The Tax Ombudsman has advised that it will review the ATO’s approach to tax debt interest (ie the GIC) and its management of compromised tax accounts in the coming year. The Ombudsman said that tax debt and ATO’s treatment of taxpayers with tax debt are a major source of complaints to the Ombudsman. It was also noted that the ATO has very publicly stated that it is toughening up its position on remitting interest when a debt is being paid back or is in a payment plan. The Ombudsman said it will be reviewing ATO’s process and procedures, and whether their stance on remission is fair, reasonable and applied consistently. The review will also focus on how the ATO manages compromised tax accounts.
To read the last two in depth discussions the Institute of Financial Professionals Australia (IFPA) has had with the Tax Ombudsman, go to our advocacy and media page here.
Treasury consultation on PwC reforms finalised
The Tax Practitioners Board (TPB) has advised that Treasury has announced the outcome of its public consultations on the following reforms to the Tax Agent Services Act 2009 (TASA): Enhancing the TPB’s sanctions regime; and Review of the eligibility requirements for tax practitioner registration with the Tax Practitioners Board (TPB). These reforms were part of the government’s response to the PwC matter and seek to strengthen the TPB’s regulatory powers. The TPB said that once the legislation has been passed by parliament, it will begin consultation on relevant administrative policies and guidance required to support these reforms.
Company not in existence to challenge cancellation of GST, ABN
An applicant has been unsuccessful before the ART in contesting the Commissioner decision to cancel both its GST registration and its Australian Business Number, and to amend relevant assessments to deny it input tax credits. In doing so the ART found that the applicant had been deregistered as a company and that there was no evidence filed by the Applicant in respect of the reinstatement of the company. Furthermore, the ART was satisfied that there is no person or company officer who could continue with the review application. (Sugardaddy Productions Pty Ltd and FCT (Practice and procedure) [2025] ARTA 880, 2 July 2025)
CSLR releases the FY26 revised levy estimate
The Compensation Scheme of Last Resort (CSLR) has released the FY26 revised levy estimate. The need for a revised estimate was triggered due to the initial levy estimate, issued in January 2025, exceeding the $20m sub-sector cap for the personal financial advice sub-sector. The revised estimate for the 2026 financial year has been calculated at $75.698m.
Average foreign exchange rates for the year ended 30 June
The ATO has released the average foreign exchange rates for the year ended 30 June 2025 for selected countries ($A1 foreign currency equivalent to average rate and nearest actual rate, respectively): Chinese renminbi – 4.6760, 4.6921; European euro – 0.5963, 0.5586; Hong Kong dollar – 5.0497, 5.1416; Indian rupee – 55.1294, 55.9900; Indonesian rupiah – 10431.5777, 10629.0000; Japanese yen – 97.0162, 94.2600; Malaysian ringgit – 2.8547, 2.7602; New Zealand dollar – 1.0966, 1.0768; Singapore dollar – 0.8589, 0.8341; South Korean won – 907.1583, 883.8900; Thai baht – 22.0392, 21.2900; UK pound sterling – 0.5011, 0.4771; and United States dollar – 0.6482, 0.6550.
Tuesday 8 July 2025
Reminder: Tax Reform Roundtable – We Want Your Input!
The Government is holding a Tax Reform Roundtable to generate fresh ideas and build consensus around reforms in three key areas: productivity, economic resilience, and budget sustainability. With tax reform now firmly on the Treasurer’s agenda as a lever to drive productivity, this is a critical opportunity to help shape the future of Australia’s tax system.
The Institute of Financial Professionals Australia (IFPA) will be lodging a high-level submission to Treasury. To ensure we represent the full breadth of our members’ views, we’re seeking your feedback. If you have ideas or suggestions on how we can advocate for meaningful, well-designed tax reform, please share them with us at [email protected] by 14 July 2025.
All policy areas are open for discussion, including:
- Personal and company income tax
- Taxation of family trusts
- Capital gains tax
- Negative gearing
- GST
- Stamp duty/land tax
- Payroll tax
- Superannuation tax concessions
Your input is vital to help us push for reform that reflects the real-world experiences of our members.
Taxpayer’s claim for hardship relief refused for lack of jurisdiction
The ART has refused a taxpayer’s application for review of the Commissioner’s refusal to determine a hardship application. It did so on the basis that no reviewable objection decision had been made as the Commissioner had yet to determine the matter – and that therefore the ART did not have jurisdiction to determine the matter. The ART also dismissed the taxpayer’s claim that the application had been implicitly refused by virtue of the Commissioner’s ongoing invitations to lodge new applications. At the same time, the ART dismissed the taxpayer’s application for a stay order as it followed that where there was no reviewable decision then any request for stay orders must be similarly dismissed. (Lee and FCT (Practice and procedure) [2025] ARTA 879,2 July 2025)
ATO: Completed and upcoming public advices for 2025 year
The ATO has issued a list of completed public advice and guidance issues for the 2025 year, as follows: Decline in value of a depreciating asset [new]; Determining the proportion of unfermented materials that may be added to ‘beer’ and ‘cider’ [new]; Supplies of land with no improvements involving multiple titles; Foreign superannuation fund and applicable fund earnings; Advice fees paid by superannuation funds; Part IVA held not to apply to a scheme involving use of intra-group debt to acquire an Australian subsidiary productive of tax benefits in Australia; Disqualifying individuals from acting as trustee for superannuation entities; Affidavit of company director to revoke or reduce an estimate of liability to PAYG withholding; Early stage innovation company schemes and Part IVA [new]; and Luxury cars and trading stock.
The ATO has also advised that it plans to seek formal comment on the following items in the coming months: Administration of penalties that apply where employers or superannuation funds fail to comply with event-based reporting obligations; Public Country-by-Country reporting transparency measure and exemption discretions; Pillar Two global and domestic minimum tax; and Positions in relation to shares or interest in shares.
CSLR releases the FY26 revised levy estimate
The Compensation Scheme of Last Resort (CSLR) has released the FY26 revised levy estimate. The need for a revised estimate was triggered due to the initial levy estimate, issued in January 2025, exceeding the $20m sub-sector cap for the personal financial advice sub-sector. The revised estimate for the 2026 financial year has been calculated at $75.698m.
Wednesday 9 July 2025
ATO: Div 7A benchmark interest rate
The ATO has released the benchmark interest rate for Div 7A purposes for the 2025–26 income year. It is 8.37% pa. Note the benchmark interest rate is used for private company loans made or deemed to have been made to determine if a loan will be treated as a dividend.
ACNC updates impact statement on Equality Australia case
The ACNC has updated its decision impact statement on the decision of the Full Federal Court in Equality Australia Ltd v Commissioner of Australian Charities and Not-for-profits Commission [2024] FCAFC 115. In that case, the Court confirmed that the applicant, which worked to relieve distress experienced by persons who identified as LGBTIQ+, was not entitled to be registered as a Public Benevolent Institution (PBI) for tax deductibility purposes as there was not “sufficient proximity” between the activities of the organisation and relief from distress. The updated decision impact statement now provides that: “If the ACNC is considering whether an organisation meets the definition of PBI, and the organisation is predominantly organised to address benevolent need through a program of advocacy, education and campaigning to achieve law reform and social change, the ACNC will need to undertake a holistic consideration of the purpose and activities of the organisation, and the nature of the benevolent need”.
Thursday 10 July 2025
GST: New residential premises ruling updated
The ATO has issued updates to the following GST rulings following the decision in Domestic Property Developments Pty Ltd as trustee for the Dals Property Trust and FCT [2022] AATA 443 which dealt with the issue of whether the sales of the units were input taxed supplies:
- GSTR 2009/4DC Goods and services tax: new residential premises and adjustments for changes in extent of creditable purpose. The changes are being made to align with the AAT decision in Domestic Property Developments Pty Ltd as trustee for the Dals Property Trust and FCT [2022] AATA 4436, with focus on clarifying our view in this Ruling that the meaning of ‘applied’ in Division 129 and ‘used’ in section 40-75 of the GST Act 1999 should not be interpreted consistently as a matter of course, and that ‘used’ should be interpreted according to its ordinary meaning.
- GSTR 2003/3DC Goods and services tax: when is a sale of real property a sale of new residential premises? The changes are being made to align with the AAT decision in Domestic Property Developments Pty Ltd as trustee for the Dals Property Trust and FCT [2022] AATA 4436, with focus on the 5-year period in subsection 40-75(2) of the GST Act 1999. The changes confirm our view that the 5-year period in subsection 40-75(2) of the GST Act 1999 requires a continuous period of 5 years use for making input taxed supplies and does not include any periods of taxable use.
No extension of time to appeal – no appellable decision made yet
The ART has dismissed a taxpayer’s application to lodge an appeal out of time. The Commissioner opposed the extension not on the basis that it was late, but on the basis that the decision from which the appeal was made was not “the decision of the Tribunal” within the meaning of s 172 of the ART Act 2024 and hence was not amenable to appeal. The AAT decisions in question were made in respect of the taxpayers request for further particulars and in relation to the issue of whether the ATO could refer to and rely on the taxpayer’s conviction at the final hearing of his application for review. The ART agreed with the Commissioner, stating that the only decision from which the taxpayer could appeal was the Tribunal’s decision in relation to the ATO’s disallowance of his to objection to his amended assessments – and that this Tribunal decision had not yet been made. (Pratten v FCT [2025] FCA 749)
NSW: Revenue ruling and guideline: Shared Equity Schemes
NSW Revenue has issued Revenue ruling DUT 052 and an accompanying guideline). Revenue ruling DUT 052 explains the process for requesting approval for a shared equity scheme and for accepting a person as a shared equity partner. The Treasurer’s guidelines DA 022 are designed to allow flexibility in the development of shared equity schemes and to encourage innovation to better meet homebuyers’ needs.
FRIDAY 11 July 2025
Update to PS LA 2011/23 Credit interest
The ATO has issued an update to Law Administration Practice Statement PS LA 2011/23 Credit interest. It has been updated to remove the requirement for the Commissioner to send written details when interest on early payment is paid due to changes to system processes. Additionally, there have been various clarifications or revisions of explanations among various credit interest topics. These include but are not limited to: overlap between interest on early payment and interest on overpayments under various parts of the Interest on Overpayments and Early Payments Act 1983 (the Act); the interest periods when the relevant tax under Part III of the Act is the result of an amended assessment; and the interest periods for when we amend the income tax assessment multiple times for a particular income year for Pt III of the Act.
Draft legislation re foreign bail‑in bonds’ tax treatment
Treasury has released draft legislation clarifying the tax treatment of foreign bail‑in bonds. The draft legislation allows these types of bonds to be treated as debt for tax purposes. The bonds must still meet the other requirements of the debt instrument test. This makes interest payments related to the bonds tax‑deductible. This aligns with the treatment for bail‑in bonds issued by Australian banks. These conditions allow the regulator to convert the instrument into equity during financial distress. Comments are due by 5 August 2025.
ATO: Advice under development – GST issues
The ATO has advised that it is developing advice and guidance on the following GST issues: cross-border supplies; food of a kind marketed as prepared meals; supplies of sunscreen; and toddler formula products.
SUPER & FINANCIAL SERVICES
Court Upholds AFCA: Poverty Doesn’t Entitle Super Death Benefit
In Steele v Host-Plus, the deceased’s son, appealed against a determination by AFCA which affirmed Host-Plus’ decision to distribute 100% of his deceased mother’s death benefit to her spouse.
The deceased’s son challenged the fairness of this decision, alleging it overlooked his and his sister’s financial dependency and failed to consider their relative financial position to that of the spouse.
However, the court found that no financial dependency existed at the time of death. It was noted that applicant’s financial hardship arose after his mother’s death and that there was no evidence that she would have helped had she foreseen his financial needs. A trustee’s decision not to pay a benefit to someone facing financial hardship was not automatically deemed unfair or unreasonable.
Private Ruling: Cross Insurance Ownership Structure Impacts Taxes
A recent ATO private ruling addresses the capital gains tax (CGT) implications of insurance proceeds received under a cross-insurance arrangement involving a discretionary trust and a total and permanent disability (TPD) policy.
The arrangement involved an individual’s discretionary trust holding a TPD policy on a business partner. In the event the business partner suffered a TPD event, the discretionary trust would pay the proceeds to the disabled business partner and the disabled business partner would transfer their business interest to the discretionary trust. Similarly, the business partner held a TPD policy on the other individual partner for the same purpose.
The ATO confirmed that payment of insurance proceeds to the policy owner triggers a CGT event (C2) under section 104-25, as the contractual right under the policy is discharged. The proceeds are subject to CGT provisions.
The capital gain is not disregarded under section 118-37 of the ITAA 1997, as the payment does not relate to personal injury suffered by the policy owner or their relative. Furthermore the 12-month 50% CGT discount does not apply. The right to compensation (the CGT asset) was acquired and disposed of within 12 months, failing to meet the minimum holding period requirement.
Citing TR 95/35: a right under an insurance policy is an asset, and for the purposes of this Ruling, falls within the definition of a right to seek compensation. This right is acquired by the policy owner when the triggering event of the policy occurs. The payment of the claim by the insurer results in the disposal of the right of the policy owner.
Institute of Financial Professionals Australia (IFPA) comment
It is important to take into consideration the CGT implications of any buy/sell arrangement recommended. Some buy/sell arrangements may trigger CGT without exemptions or discounts.
ASIC Adviser Levy for 2024/25 Released
ASIC has published its Cost Recovery Implementation Statement (CRIS) which sets out the estimated costs and levies for the industry sector in 2024/25 under the industry funding model.
The CRIS report shows that licensees (AFSLs) providing personal advice to retail clients on relevant financial products, which comprises most of the sector, will pay $39.271 million. This is based on 2680 AFSLs with 15,233 advisers. In essence, an AFSL will pay the minimum levy of $1500 plus $2314 for every adviser on their books.
The levy also applies to:
- Licensees that provide personal advice to retail clients on products that are not relevant financial products – the levy is $44,000 to be shared by 565 licensees who will pay $80 each.
- Licensees that provide general advice – the levy is $5.234 million to be shared by 1122 licensees who can expect to pay a flat levy of $4,665 each.
- Licensees that provide personal advice to wholesale clients only – the levy is $1.642 million to be shared by 1,991 licensees who will pay a flat levy of $825 each.
As part of its $39.3 billion levy budget for FY25, ASIC plans to allocate $17.2 million to enforcement activities and $5.6 million to supervision and surveillance.
CSLR Levy Reduced for 2025/26
The Compensation Scheme of Last Resort (CSLR) has released a revised estimate for the 2025/26 levy period – the scheme’s third levy cycle. The updated estimate for the financial advice sector is $67.289 million, a reduction from the initial January 2025 estimate of $70.110 million.
The revision was necessary because the initial estimate exceeded the $20 million sub-sector cap for the personal financial advice sector. As a result, the Scheme has advised the Minister for Financial Services of the requirement to impose a special levy of $47.289 million to cover the shortfall above the cap.
CSLR Chief Executive David Berry acknowledged the situation, stating: “Whilst we are disappointed at the need for a special levy, we recognise these funds provide a measure of compensation for those who have experienced lengthy and stressful financial loss.”
IFPA comment
While the slight reduction in the ASIC levy for the 2025 financial year is a welcome development, it continues to place a significant burden on the already contracting financial advice sector – most of which comprises small businesses.
We remain seriously concerned about the CSLR and have called on the government to urgently reform the Scheme to ensure it is fair, financially sustainable, and consistent with its original intent. Without prompt action, the rising costs threaten the viability of small advice practices and could further restrict consumer access to quality financial advice.
We have outlined eight key reform recommendations in our submission to government, which can be accessed here.
Question of the Week
Is it still possible to claim a tax deduction for a personal superannuation contribution made in 2023/24 if the Notice of Intent (NOI) to claim the deduction is submitted after 30 June 2025?
Answer
To claim a tax deduction for a personal super contribution, several requirements must be met – one of the most critical being the timely lodgment of a valid NOI with the superannuation fund.
The NOI must be submitted to the fund by the earlier of:
- The day the individual lodges their tax return for the income year the contribution was made (the return hasn’t yet been lodged in this case), or
- The end of the income year following the year the contribution was made – that is, by 30 June 2025 for contributions made in 2023/24.
If the NOI is not submitted by this deadline, the super fund cannot accept it, and the contribution will not be deductible. In addition, a notice will be invalid if:
- The individual has commenced an income stream using any part of the contribution, or
- The super fund no longer holds the contribution amount.