1 June 2026 to 5 June 2026
Weekly Bulletin Contents
TAX
monday 1 June 2026
Oral health therapist an employee, not a contractor, for SG purposes
The ART has ruled that an oral health therapist (OHT) engaged by a dental practice was an “employee” of the practise under the extended definition of employee in s 12(3) Superannuation Guarantee Act. Therefore, the practice was liable for around $70,000 in unpaid superannuation guarantee charge. In arriving at this conclusion, the ART found that the wording of the OHT’s contract contemplated personal performance of the contract by her. It also found that while the contract contemplated “delegation (as imposed by the relevant professional Code of Conduct) it was not persuaded that these professional obligations meant that she had the freedom to choose to delegate or subcontract her obligations to another person of her choice in the way contemplated by the legal authorities. (Balmain Dental Clinic Pty Ltd as Trustee for Dentist & Co Trust and FCT (Taxation and business) [2026] ARTA 895, 22 May 2026)
Payday super declaration re “contribution base”
The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment (Payday Superannuation) Declaration 2026 has been made. It makes amendments to recognise changes made by the Payday super legislation whereby the ‘maximum contributions base’, will move from a quarterly base amount to an annual base amount, and will operate as a direct limit on contributions rather than on ordinary time earnings. It also deals with contribution obligations which will apply to employers by reference to an employee’s ‘qualifying earnings’ on a ‘QE day’ rather than on OTE in a quarter, and the variable ‘charge percentage’ to be fixed at 12%.
Full Court: Taxpayer assessable on $30m deposits in bank accounts
The Federal Court has unanimously allowed the Commissioner’s appeal from the decision in Cheung v FCT [2024] FCA 1370. In that case, the primary judge found that deposits of over $30m in the bank account of the taxpayer or his wife from 2005 to 2015 were not income under ordinary concepts (for a range of reasons, including that he was not the sole owner of the relevant business). However, on appeal the Full Court found that the primary judge ought to have found that the taxpayer’s onus of proof had not been discharged. The Full Court also said that, in this case, where there were serious issues about a flawed fact finding process, it was entitled to interfere with factual findings on a real review of the evidence (notwithstanding its role as an appellate court). Accordingly, subject to a favourable adjustment of $1.16m, the Court allowed the Commissioner’s appeal. (FCT v Cheung [2026] FCAFC 75)
tuesday 2 june 2026
Tax Reform Bill referred to Senate Committee
The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (which implements some of the 2026-27 Budget changes) was passed by the House of Reps on 28 May 2026. The Bill has been referred to the Senate Economics Legislation Committee, for report due by 22 June 2026.
Rental property deductions limited to rent received
The ART has affirmed assessments issued for the 2005 to 2021 income years in which the Commissioner limited deductions claimed by the taxpayer on a rental property to the amount of rent received. The Commissioner did so on the basis that the property was not rented on commercial terms (and also in view of concerns over the mixed use of the property). The ART also confirmed the Commissioner’s decision to disallow car expenses claimed on the grounds that the expenses had not been properly substantiated under the log method – albeit, the Commissioner conceded that the taxpayer was entitled to deductions of some $15,000 in one income year. (Eltamimy and FCT (Taxation and business) [2026] ARTA 929, 28 May 2026)
ATO: Avoid dodgy gift donations
The ATO is continuing to warn the community to steer clear of a tax scheme involving ‘barter credits’ (a form of trade credit used in some business networks). It said this is described in TA 2025/3 Arrangements to improperly access deductions for donations of ‘barter credits’ – and the tax scheme involves an individual or business paying for access to barter credits and donating them to deductible gift recipient (DGR) organisations. However, the business network returns barter credits at an artificially inflated value – allegedly worth significantly more than what was paid. The dodgy donor then claims a tax deduction for the full-face value of the donation. The ATO said that this is illegal and deprives the community of essential funds. Beware of any arrangements that have these characteristics. The ATO also said this scheme is spreading via personal networks, such as friends, family and acquaintances.
Withholding Variation for laundry and award transport payments
The Draft Taxation Administration Amendment (Withholding Variation for Payment of Certain Allowances) Legislative Instrument 2026 has been made. It reduces the amount required to be withheld for PAYG purposes to nil from payments of allowances for laundry expenses and award transport payments where relevant conditions are met. This is due to proposed changes to the substantiation of work-related expense deductions and the provision of a standard deduction for income years beginning on or after 1 July 2026.
wednesday 3 june 2026
Taxpayer a promoter of tax exploitation schemes
The Commissioner has been successful before the Federal Court in seeking declarations that a taxpayer contravened s 290-50(1) of Sch 1 to the TAA 1953 (relating to being a “promoter of a tax exploitation scheme” and the imposition of civil penalties). The Commissioner alleged that the taxpayer engaged in conduct that resulted in him being the promoter of 12 tax evasion schemes for clients or, alternatively, resulted in his associates being promoters of some of those schemes. Under the schemes, it was also alleged that the taxpayer entered into arrangements with clients which involved him taking a percentage of any R&D incentive secured. The end result of the Commissioner’s successful application was that the Court ordered that the matter be listed for case management in order for a hearing on the remaining issues, which concerned the imposition of penalties and costs. (FCT v Perez (No 2) [2026] FCA 658, 28 May 2026)
No jurisdiction to review decision to refuse payment arrangement
The ART Has refused a taxpayer’s application for review of a decision of the Commissioner refusing a payment arrangement proposed by the taxpayer and a decision declining to remit general interest charges. The ART ruled that it did not have the jurisdiction to determine any of the decisions. The ART also therefore dismissed the taxpayer’s application for a stay of the operation and implementation of the Commissioner’s relevant objection decisions pending the determination of these matters. (Hampton and FCT (Taxation) [2026] ARTA 952, 29 May 2026)
Treasury consultation on tax whistleblowing laws
Treasury is seeking feedback on tax and corporate whistleblowing laws in Australia. In 2019, a tax whistleblowing regime was introduced into the Taxation Administration Act 1953. The review will investigate whether these laws are working as intended, identify any ongoing concerns, and, where appropriate, recommend further improvement. Comments due: 29 July 2026.
Correction – Tax Reform Bill not passed by House of Reps yet
In yesterday’s Daily Update [Tues 2 June 2026] we wrongly reported that the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (containing Budget measures) had been passed by the House of Reps. Rather, it is only at second reading stage in the House of Reps. However, it has been referred to the Senate Economics Legislation Committee, for report due by 22 June 2026.
thusday 4 june 2026
ATO: Declaring on-line/share economy income
The ATO has issued a reminder that money you earn through digital platforms or apps, is sharing economy income and you need to report it in your tax return. This income can include payments you receive for: ride-sourcing, taxi, limousine or delivery services; short-term accommodation or property sharing; and renting or hiring out assets. The ATO said that to correctly report all your income, ensure you manually include sharing economy income when you lodge your tax return. The ATO also stressed that sharing economy platforms provide it with information about such income earned through their services and that the ATO said that it uses this data to check you’ve reported everything correctly.
Determination: Super entitlements of separated and divorced spouses
The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2026 has been made. It relates to the adjustment of superannuation entitlements of separated and divorced spouses, and of separated de facto couples. The entitlements are provided under certain orders or agreements that split particular kinds of future superannuation benefits made in property settlements under the Family Law Act 1975. The determinations relate to orders or agreements providing for a base amount split of future superannuation benefits (one of two kinds of splits that can be made under the Family Law Act of most types of superannuation), payable in respect of a defined benefit superannuation interest or an interest in a self-managed superannuation fund.
Default assessment affirmed
The ART has affirmed default assessments issued to a taxpayer for 2 income years. The ART found that the taxpayer, who had been imprisoned for 7 years and who had previously failed to comply with tribunal directions etc, had failed to discharge the onus of showing that the assessment were excessive because of, among other things, incomplete documentary records. The ART also affirmed penalty assessments for two other income years – where shortfall penalties were imposed for intentional disregard of a taxation law. In doing so, the ART found that the relevant safe harbour provisions were not applicable. (THWD and FCT (Taxation) [2026] ARTA 958, 2 June 2026)
friday 5 june 2026
Tax Reform Bill passes House of Reps
The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, and the accompanying Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 was passed by the House of Reps on Thurs 4 June 2026. (The Bills contains the CGT discount and negative gearing and other changes announced in the 2026-27 Budget.) The Bill now moves to the Senate. However, it has been referred to the Senate Economics Legislation Committee, for report due by 22 June 2026.
Note: Some media reports suggest the Government is seeking to pass the Bills into law by early July 2026.
ATO: Family trusts elections – key tips
The ATO has released information on family trust distributions tax (FTDT) leading up to 30 June for a trustee of a family trust who has made a family trust election (FTE) or an entity with an interposed entity election (IEE). The ATO said that it is important for advisers to act now to lower the risk of FTDT liabilities arising.
South Australian 2026-27 State Budget handed down
The South Australian 2026-27 State Budget was handed down on Thursday 4 June 2026. The main tax-related measure is a new Downsizing Stamp Duty Concession for seniors (applicable to South Australians aged 60 and over). It applies to contracts signed on or after 25 March 2026. It will provide a full exemption on new homes valued up to $2m and for vacant land (to build a new home) valued up to $1.2m. This concession phases out up to $2.1m (homes) and $1.3m (land). In addition, victims of domestic, family and sexual violence will be eligible for 100% stamp duty relief and the First Home Owner Grant, even if they had purchased a home previously, under a new ex gratia scheme.
SUPER & FINANCIAL SERVICES
Bill containing Federal Budget measures passes House of Reps
- The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 has passed the House of Representatives and now sits with the Senate Economics Legislation Committee, due to report by 22 June 2026. Key measures: the 50% CGT discount is replaced from 1 July 2027 by cost base indexation plus a 30% minimum tax on capital gains (bringing post-1 July 2027 gains on pre-CGT assets to tax for the first time); negative gearing losses on residential property acquired from 7:30pm 12 May 2026 are quarantined from 1 July 2027, with new builds carved out; a $1,000 standard deduction for work-related expenses applies from 2026-27; and a non-refundable Working Australians Tax Offset (capped at $250) starts in 2027-28.
Maximum contribution base for 2026–27: $270,830
The ATO has updated its guidance on the maximum contribution base (last updated 3 June 2026). For 2026–27, the base is $270,830, up from $250,000 in 2025–26. This reflects the indexation of the general concessional contributions cap to $32,500. From 1 July 2026 the base is calculated as the concessional cap × 100 ÷ the SG charge percentage (12%), rounded down to the nearest $10. Once an employee’s qualifying earnings reach the base in a financial year, no further SG is payable on earnings above it (though award or enterprise agreement obligations may continue).
Note the updated guidance applies to earnings paid from 1 July 2026, aligning with the move to payday super; the quarterly SG rules continue to apply to earnings paid up to 30 June 2026.
Deadline for minimum pension drawdown
The ATO has reminded SMSF trustees to make minimum pension payments for the 2025–26 year by 30 June. The minimum is worked out by applying the member’s age-based percentage factor to their pension account balance at 1 July 2025, or on a pro-rata basis where the pension commenced part way through 2025–26. If the minimum isn’t paid in full by 30 June, the pension is generally treated as not having been payable for the year. This means the fund can lose exempt current pension income on the supporting assets.
Question of the week
In relation to revaluations for Div 296 and the adjusted cost base of assets at 30 June 2026, do the valuations need to be done by qualified valuers, or can we simply continue with our normal year-end valuation process?
The short answer is that you can largely keep doing what you are normally doing for year-end valuations. However, it should be done with greater care given the significance of the 30 June 2026 figures. For preparing the fund’s accounts and statements you are not required to obtain a valuation from a qualified independent valuer, and you do not need an independent property valuation every single year. However, the ATO recommends using a qualified independent valuer where the asset represents a significant proportion of the fund’s value, or where the nature of the asset makes the valuation likely to be complex. This carries particular weight for the 30 June 2026 reset, where the value permanently fixes the adjusted cost base for Div 296 purposes.
The property must still be valued at market value by the trustees in each income year, based on objective and supportable data arrived at through a fair and reasonable process. For real property, the ATO expects that valuation to draw on more than a single source for example comparable sales, an independent agent’s appraisal, the price of any recent arm’s length purchase, and any improvements made since the property was last valued. The same market-value standard applies when determining the value of assets supporting members’ retirement phase and accumulation accounts for the purpose of calculating their total superannuation balances as at 30 June.
For more information see the ATO’s Guide to valuing SMSF assets page.