30 June 2025 to 4 July 2025
Weekly Bulletin Contents
TAX
Monday 30 June 2025
ATO warns taxpayers: Don’t lodge yet!
The ATO has reminded taxpayers to wait to lodge their income tax return until pre-fill is complete and warned them not to lodge their tax returns until their income statement is marked as ‘tax ready’ and data has been pre-filled by the ATO. The ATO said that last year 142,000 people who lodged in the first 2 weeks of July had to lodge amendments, or had their returns investigated and amended by the ATO to fix inaccuracies in their tax return, for example, income that had not been declared properly. The ATO also said that waiting until late July allows for the ATO to prefill information in your tax return and that the best time to lodge is from late July.
TPB concerned about practitioner loans to clients at tax time
The Tax Practitioners Board (TPB) has advised that it is concerned that tax time loans, from tax practitioners, may not be fair or in their clients’ best interests. Tax practitioners providing improper tax time loans may harm consumers, especially vulnerable members of our community. TPB reviews and investigations will address integrity issues and ensure tax advice is provided with care, competence and independence. Note: Tax time loans may vary in structure, but in substance can involve a tax practitioner, or associated lender, providing a short-term loan or advance on an estimated tax refund to a client.
ATO: Taxation Statistics report for the 2022–23 year
The ATO has released its annual Taxation Statistics report for the 2022–23 year. The report contains data extracted from tax returns and related schedules, as well as other information provided to the ATO. The data generally follows trends from previous years, with the average taxable income and average superannuation account balance rising, reflecting a return to conditions from before COVID-19. This report also includes information relating to the 2023–24 financial or fringe benefits tax year, including for GST, excise and fuel schemes and FBT.
Supervisory Levies Determination 2025 made
The Australian Prudential Regulation Authority Supervisory Levies Determination 2025 has been made. Its purpose is to determine the basis of the levy payable by leviable bodies (such as general insurers, life insurers, private health insurers, superannuation entities and providers of retirement savings accounts) for the 2025-26 financial year.
Tuesday 1 July 2025
ATO: Have you paid your super guarantee entitlements?
The ATO has issued a reminder that if your business hires staff, you need to pay your eligible workers’ super guarantee (SG) in full, on time and to the right fund by 28 July. It also said that you will need to allow extra time for the payments to reach your employees’ super funds if you’re using a commercial clearing house as payments are only considered ‘paid’ when the super fund receives them. Importantly, the ATO also emphasised the SG rate increases from 11.5% to 12% on 1 July 2025 and that you’ll need to apply the 12% rate for all wages paid to eligible workers on and after 1 July (even if some or all of the pay period it relates to is before 1 July).
ATO: 2025 Tax time toolkit released
The ATO has published its 2025 tax time toolkit. It contains a range of downloadable resources with information on: occupation-specific deductions; common work-related expenses; records you need to keep; and residency for tax purposes. The ATO has also reported mistakes being made on tax agent lodged returns in relation to CGT matters. The ATO says these things can be avoided by: asking clients some questions about assets they’ve sold; and checking online services for agents (OSFA) pre-fill reports. See also Avoiding common CGT errors.
Wednesday 2 July 2025
ATO: Partnerships of all sizes can lodge digitally
The ATO has advised that updates to lodgment software let partnerships of all sizes lodge statements of distribution digitally. (Before 1 July 2025, you could only digitally lodge statements of distribution (SODs) for up to 160 partners in a partnership – with the rest had to be lodged manually.) The updated lodgment software means you can digitally lodge SODs for all partners. The ATO said lodging digitally means the data will be available to you for lodgment in future years. The ATO also said digitally lodged data also helps it to cross-check and assure that partners are correctly reporting income. This helps the ATO target compliance actions more accurately and lets it readily identify partners who are doing the right thing. This is even more important given the ATO’s increased focus on allocation of profits within professional firms.
NSW Revenue: Remission of Interest Guidelines TAA 001
NSW Revenue has released Remission of Interest Guidelines TAA 001. It explains the application of Interest to all taxation laws and statutory obligations pursuant to the Taxation Administration Act 1996. Section 25(3) of the Taxation Administration Act 1996 provides that interest must be remitted only in accordance with the published Guidelines.
APRA: New prudential standard on operational risk management
APRA has advised that superannuation funds (and banks and insurers) will need to meet higher standards of operational risk management from 1 July 2025 as new requirements come into force. APRA said Cross-industry Prudential Standard (CPS) 230 Operational Risk Management requires APRA-regulated entities to be well-prepared to ensure continuity of critical services to the community and respond to business disruptions by: identifying important business services and determining the extent to which these services can continue during severe disruptions; testing their business continuity planning to identify vulnerabilities to ensure they are positioned to overcome severe disruptions; and enhancing third-party risk management by ensuring risks from material service providers are identified and appropriately managed.
Thursday 3 July 2025
Tax Reform Roundtable – We Want Your Input!
The government is holding an Economic 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.
QLD and NSW floods declared disasters for deductible gifts purposes
The Income Tax Assessment (Australian Disaster Relief Funds) Amendment Declaration (No. 2) 2025 has been made. It provides that the recent floods in western Queensland and in north-eastern NSW are declared as a disaster for the purposes of deductible gifts or contributions made to relevant disaster relief funds for people affected by the floods.
Decision Impact Statement on Bowerman case
The ATO has issued a Decision Impact Statement on the decision in Bowerman v FCT [2023] AATA 3547 in which the AAT allowed a deduction under s 8-1 for a loss incurred on the sale of the taxpayer’s home as it was acquired with the purpose of making a profit in a commercial manner. The ATO noted that the facts and the result of the case were ‘unusual’ (as the AAT also said). It also said the AAT’s decision was open on the particular facts and was an available application of the established Myer Emporium principles and that the decision must be read in the context of the clear statements of principle from the courts that a profit-making purpose alone is insufficient to engage the Myer Emporium principle. It also noted that the case applied the approach of the Full Federal Court in Greig v FCT [2020] FCAFC 25 which the ATO said remains the most authoritative explanation of the concept of a ‘business operation or commercial transaction’ within the meaning of the principle established in Myer Emporium. However, the ATO said it takes a different view to the AAT as to the interpretation of TR 97/7 Income tax: section 8-1 – meaning of ‘incurred’ – timing of deductions, and has subsequently updated TR 97/7 to remove any perceived ambiguity or uncertainty as to its interpretation (below).
Addendum to TR 97/7 Section 8-1: meaning of “incurred”
The ATO has issued an addendum to Taxation Ruling 97/7Income tax: section 8-1 – meaning of ‘incurred’ – timing of deductions to clarify the meaning of “incurred” and “losses and outgoings” following the decision in Bowerman v FCT [2023] AATA 3547 (in which the AAT allowed a deduction under s 8-1 for a loss incurred on the sale of the taxpayer’s home, which she acquired with the purpose of making a profit in a commercial manner). It provides that “it may be necessary in some instances to make a distinction between losses and outgoings” and that in this regard “a loss must be definitively encountered, run into, or fallen upon by the taxpayer. For a loss to be incurred it must be realised and more than impending, threatened or expected. A taxpayer will not have incurred a loss if some contingency means that they are not ‘definitively committed’ or ‘completely subjected’ to it”. Importantly, it also provides that “a taxpayer’s accounting system does not determine the timing of when an outgoing or loss is ‘incurred’.”
FRIDAY 4 July 2025
Tax practitioner banned for misconduct
The Tax Practitioners Board (TPB) has advised that it has terminated the registration of tax agent and has banned him from reapplying for registration for a period of 3 years. The TPB determined that he breached the Code of Professional Conduct and that he was no longer a “fit and proper person” for the purposes of practicing as a tax agent. Due to the serious misconduct findings against him he is also now a disqualified entity, preventing him from providing tax agent or BAS services on behalf of a registered tax practitioner. The TPB’s investigation uncovered multiple breaches, including failure to act honestly and with integrity and non-compliance with taxation laws regarding his personal affairs.
Draft instrument: valuing shares for ESS start up concessions
Draft Income Tax Assessment (Methods for Valuing Unlisted Shares for the Employee Share Scheme start-up concession) has been issued for comment. It repeals the whole of Income Tax Assessment (Methods for Valuing Unlisted Shares) Approval 2015 and provides that the methods set out in ss 7 and 8 of the Instrument are approved for working out the market value of an unlisted ordinary share in a company, for the purposes of determining if the conditions relating to market value in s 83A-33(5) of the ITAA 1997 are met in relation to employee share scheme start-up concession. Comments are due by 30 July 2025.
Draft Income tax regulations released for comment
Treasury is seeking submissions on draft Income Tax Assessment (1936 Act) Regulations 2025 and draft Treasury Laws Amendment (Income Tax Assessment Repeal and Consequential Amendments) Regulations 2025 and accompanying material. The purpose of the Regulations is to remake and improve the operation of the Income Tax Assessment (1936 Act) Regulation 2015 before they ‘sunset’. They also repeal redundant provisions, simplify language and update existing rules and requirements to ensure they continue to operate in accordance with existing policy. Comments are due 15 July 2025.
ASIC: Pushy sales tactics urging people to make quick super switches
ASIC is warning Australians to be on red alert for high-pressure sales tactics, click bait advertising and promises of unrealistic returns which encourage people to switch superannuation into risky investments. The warning comes amid increasing concerns from ASIC that people are being enticed to invest their retirement savings into complex and risky schemes. ASIC said the start of a new financial year was often the trigger for people to check their super fund’s performance and urged consumers to be extra cautious.
SUPER & FINANCIAL SERVICES
ASIC Warns of Pushy Superannuation Sales Tactics
ASIC has issued a media release warning Australians about aggressive sales tactics urging quick superannuation switches into risky investments. The alert highlights concerns over high-pressure calls, clickbait ads, and promises of unrealistic returns that entice people to move their retirement savings into complex schemes.
ASIC Deputy Chair Sarah Court emphasized caution, especially at the start of the new financial year when many review their super. Red flags include pressure to decide quickly, cold calls, free “super health checks,” and offers to consolidate “lost super” for free.
ASIC advises seeking independent advice before switching super and visiting their Moneysmart page for tips to avoid traps. A new consumer awareness campaign builds on last year’s efforts to highlight tactics used to generate super rollovers.
Institute of Financial Professionals Australia (IFPA) comment
The media release follows ASIC’s Key Issues outlook 2025 which identified ‘Unsuitable superannuation advice resulting in adverse consumer outcomes’ as an area of focus.
Question of the week – Recontribution strategy for estate planning purposes
My client (age 70) is single and intending on leaving his super to his adult daughter via a binding death benefit nomination. The client’s super fund has a large taxable component that will be taxed if received by a non-tax dependant, such as an adult child. If my client withdraws $360,000 from his super and recontributes this amount back in as a non-concessional contribution for the purpose of reducing the taxable component, will the ATO see this as tax avoidance?
Answer
There has been little public ATO guidance on this strategy since it published Guidance on recontributions to superannuation in August 2004. At the time, the taxable component of a member’s income stream was taxed regardless of age. Since then, super withdrawals over the age of 60 are generally tax-free. Recontributions for the purpose of increasing the tax-free component of an income stream to reduce the amount of assessable income on payments was not deemed to be Part IVA.
A closer scenario was latter presented to the ATO in an industry consultation forum where the ATO confirmed that ‘it may be difficult to apply Part IVA to a recontribution strategy involving individuals who are 60 or older and entitled to receive tax free superannuation benefits. For such individuals, the purpose of a recontribution strategy is to reduce the tax payable by another person such as a non-dependant child who receives superannuation benefits once a particular member has died. In such a case it is very difficult to identify with certainty a tax benefit’. See Superannuation technical minutes, September 2010.
The ATO commentary is old but general anti-avoidance rules have not changed. It is reasonable to assume the ATO’s view remains the same. However, the commentary at the industry consultation forum alludes to a scenario when death is not foreseen. It is unclear whether the ATO would hold the same view where there is a greater certainty of the tax benefit. For example, a terminally ill member implements a recontribution strategy and dies (as anticipated) the next day.