2 March 2026 to 6 March 2026
Weekly Bulletin Contents
TAX
Monday 2 March 2026
Ombudsman calls for ATO to improve the way it interest charge relief
The Tax Ombudsman, Ruth Owen, has called for the ATO to urgently improve the way it offers relief from interest charges on tax debts for taxpayers trying to do the right thing. She said interest charges (and the ATO’s increasing refusal to reduce or refund them) is contributing to growth in tax debt, increased financial stress for Australia’s struggling families and small businesses, leading to a loss in confidence in the tax system. In her latest report, the Tax Ombudsman highlighted inconsistent decision-making, vague guidance and poor communications were contributing to confusion and unfair outcomes. She further said the ATO’s decision-making isn’t meeting community expectations. In particular, she said it is impacting too harshly on some taxpayers trying to do the right thing in repaying their tax debts.
No relief for capital gain made because of forced sale during Covid
A taxpayer who made a capital gain of $200,00 on a distribution from a family trust that bought and sold shares within 12 months in 2020, has been unsuccessful before claiming that he should not be assessed on the gain. He argued that the extraordinary circumstances of government mandated COVID lockdowns at the time necessitated the involuntary sale of the shares to sustain his fitness business (that he ran in his own name) and to support employees of that business. In dismissing the taxpayer’s application, the ART first noted that the taxpayer was not entitled to any CGT concessions in the circumstances (ie the discount, small business etc). The ART then concluded that there were no discretionary provisions under the ITAA 1997 “to allow the intent, reason or purpose for the disposal of the CGT asset into account to thereafter disregard the capital gain on the basis of hardship, forced sales or the use to which the proceeds are put”. (Lewis and FCT (Taxation) [2026] ARTA 256, 25 February 2026v)
Institute of Financial Professionals Australia Comment: Interestingly, the ATO has withdrawn ATO ID 2010/124 (Sale of shares without the owner’s consent – stockbroker’s mistake) which provided that CGT event C1 occurred in this case and that therefore roll-over under Subdiv 124-B of ITAA 1997 was available. The ATO has said it has been withdrawn as only CGT event A1 occurs in this case – and therefore the roll-over under Subdiv 124-B of ITAA 1997 is not available.
AFCA: Record number of complaints
The Australian Financial Complaints Authority (AFCA) has advised that it has received a record number of complaints in 2025, with 111,373 complaints coming through the door – a 14% increase from 2024 calendar year. Consumers and small business owners secured $643m in compensation and refunds after coming to AFCA, which is another record and a 120% increase from the previous calendar year. AFCA said the increase in complaints was spread across all financial products, including banking and finance, insurance, investments and advice, and superannuation. Large scale collapses in the financial advice sector resulted in a 58% increase in investment and advice complaints, including a 59% increase in complaints from SMSFs.
Tuesday 3 march 2026
No deduction to pilot for cost for medical clearance
The ART has ruled that a pilot, who was in the process of securing new employment when his medical clearance was suspended, was not entitled to a deduction for the medical expenses he incurred to obtain a medical clearance. In disallowing his claim for a deduction for the medical expenses, the ART said the expenses were incurred “functionally too soon” as they merely put him in a position to obtain new employment as a pilot – and therefore the expenses were not in the course of producing his assessable income for the purposes of deductibility under s 8-1 of the ITAA 1997. (Farley and FCT (Taxation) [2026] ARTA 255, 23 February 2026)
TPB reinforces importance of full disclosure during registration
The Tax Practitioners Board (TPB) has noted the recent conviction of a former tax agent for making a false or misleading statement in a renewal application for registration. The tax agent was convicted in the Parramatta Local Court of an offence under s 8K(1)(a) of the TAA 1953. He pleaded guilty and was fined. The offence related to a renewal application lodged with the TPB. In that application, he responded “No” to a question asking whether he or any associated entities over which he had direct or indirect control, had overdue tax obligations. This statement proved to be false as at the time of lodgement, multiple entities associated with the tax agent recorded outstanding tax lodgements. The TPB emphasised that as part of the renewal process, applicants must declare that the information provided is true and correct and that providing false or misleading information in a material particular is an offence under taxation law.
ATO: When you may need new car log book
The ATO has issued a reminder that taxpayers can keep the same logbook for their car for 5 years, but there are circumstances where they may need a new one during that period. The ATO said a new logbook may be required when your client: changes jobs; moves to a new house or workplace; or have changes to their pattern of use of the car for work purposes. The ATO also said taxpayers using the logbook method for 2 or more cars need to keep a logbook for each car and make sure they cover the same period. Also, clients who purchase a new car during the income year and want to continue relying on their previous car’s logbook must make a nomination in writing which must be made before they lodge their tax return and state: they’re replacing their original car with a new car; and the date that nomination takes effect.
Wednesday 4 March 2026
ATO focus areas for small businesses: cash reporting and FBT
The ATO has released its latest focus areas, highlighting two key compliance risks for small businesses: under-reporting cash income or paying workers ‘off the books’ to avoid tax and business obligations. This behaviour creates an unfair playing field and puts both businesses and workers at risk; and overlooking or misreporting FBT when providing work vehicles for private use. Employers who fail to meet their FBT obligations may face review, audit and penalties. It said tax professionals play a critical role in helping clients stay compliant by: asking the right questions about cash income and private use of work vehicles; ensuring records align with industry standards; and advising on GST registration, employer obligations, and FBT obligations.
ATO: 50% don’t know they need a CGT withholding clearance certificate
The ATO has advised that nearly half of people who responded to a poll on the ATO’s social media didn’t know you need clearance certificate when selling property. It said all Australian residents selling or disposing of Australian real property must have a clearance certificate and give it to the purchaser at, or before settlement – and that without a clearance certificate, the purchaser must withhold up to 15% of the sale (or market value if not sold at arm’s length) for foreign resident capital gains withholding (FRCGW) purposes.
Determination: GST and frequency of Fund-raising Events
A New Tax System (Goods and Services Tax) (Frequency of Fund-raising Events) Determination 2026 has been made. It allows an endorsed charity, a gift-deductible entity or a government school to treat all supplies it makes in relation to a fund-raising event as being input taxed where it holds 15 or fewer like or similar fund-fundraising events in a prescribed accounting year.
Thursday 5 March 2026
Taxpayer successful in seeking reduction in ESST penalties
A taxpayer has been partly successful in seeking review of shortfall penalties (arising from false and misleading statements in relation to the failure to report income) and electronic sales suppression tool (ESST) penalties (for the use of an ESST tool in a business run by company of which taxpayer had been director and/or manager). The ESST penalties had been imposed on both the company and on the taxpayer on basis that she aided or abetted activities relating to ESST. The ART agreed to a partial remission of the EEST penalties to 20 base units and 40 base units (as relevant) and the shortfall penalties to 50% (albeit maintaining a 20% uplift component for one year in question). In doing so, the ART took into account the taxpayer’s lack of formal education, limited English proficiency, medical conditions and financial hardship. However, it stressed that poor health or financial stress suffered by a taxpayer would not ordinarily be sufficient reasons for remission of penalties. (Yuen and FCT [2026] ARTA 279, 3 March 2026)
ATO: Turning a hobby into income? You might be in business
The ATO has issued a reminder about whether a person is running a business from your hobby or side hustle activities. It said that if such people start earning money from doing these activities regularly, they may be carrying on a business without realising it. The ATO said that generally, carrying on a business involves ongoing and repeated activities with the intention of making a profit. These activities can include: keeping records of work; obtaining and maintaining any necessary licences or permits; and regularly providing goods or services.
Friday 6 March 2026
Consultation: Family violence perpetrators accessing victims’ super
The Government has advised that it is commencing public consultation on reforms to prevent perpetrators of family and domestic violence from receiving the superannuation death benefits of their victims. In some circumstances, current laws can result in superannuation death benefits being paid to a person who perpetrated family or domestic violence against the deceased. The government said public consultation will help ensure any reforms are practical, balanced and informed by both expert input and the experience of victim-survivors and their families. Submissions due by15 April 2026.
GST Determination: Attribution Rules – Motor Vehicle Incentive Payments
The A New Tax System (Goods and Services Tax) (Attribution Rules – Certain Motor Vehicle Incentive Payments made to Motor Vehicle Dealers) Determination 2026 has been made. It allows a motor vehicle dealer to attribute the GST on the sale of a motor vehicle to the tax period in which the dealer knows the total amount they will receive for that vehicle. This would usually be when they enter into a contract with the customer to sell the vehicle. The instrument only applies in circumstances where the dealer receives an amount as an incentive payment from the vehicle manufacturer, distributor or importer in an earlier tax period, which forms a part of the total amount they will receive for the vehicle, or if the dealer issues an invoice for that incentive payment in the earlier tax period.
GST Determination: Attribution Rules – Supplies of Electricity Distribution
The A New Tax System (Goods and Services Tax) (Attribution Rules – Supplies of Electricity Distribution Services) Determination 2026 has been made. It allows a supplier of electricity distribution services to attribute GST and adjustments on supplies it has made to the tax period in which it receives from its billing agent all the information that is necessary to ascertain the total amount it will receive for the supply. This applies in circumstances where a billing agent issues an invoice for the supply on behalf of the supplier.
SUPER & FINANCIAL SERVICES
ASIC updates tips for giving SMSF advice
ASIC has updated Information Sheet 274 (INFO 274) Tips for giving self-managed superannuation fund advice.
The recent revision includes minor technical amendments. The information sheet remains a practical guide for AFS licensees and financial advisers providing personal advice to retail clients on SMSFs. It covers key obligations and considerations including:
- Using professional judgement to assess whether an SMSF is suitable for the client
- Comparing risks of an SMSF versus an APRA-regulated fund (fraud/theft compensation, complaints handling, trustee responsibilities)
- Factoring in setup and ongoing costs
- Trustee structures, investment strategy requirements, insurance needs, and
- Developing an appropriate exit strategy.
$3m Division 296 tax passes Lower House
The Bill proposing the $3m Division 296 tax has passed the Lower House and now sits in the Senate. The Bill would introduce an additional tax on earnings attributable to total superannuation balances (TSBs) exceeding $3m. Specifically, from the 2026-27 income year onwards, the tax rates applying to superannuation earnings will be:
- For superannuation balances up to the $3m large superannuation balance threshold – up to 15% on earnings (unchanged from current tax arrangements)
- For superannuation balances between the $3m ‘large superannuation balance threshold’ and the $10m ‘very large superannuation balance threshold’ – up to an overall 30% on a percentage of earnings, and
- For superannuation balances above the $10m ‘very large superannuation balance threshold’ – up to an overall 40% of earnings for TSBs above $10m
These thresholds will be indexed to the Consumer Price Index.
Consultation opens on reforms to prevent family violence perpetrators accessing victims’ super death benefits
Treasury has opened consultation on options to reform superannuation death benefit rules so that perpetrators of family and domestic violence cannot receive the superannuation of their victims.
At present, the rules allow death benefits to be paid to a perpetrator in some circumstances. The changes would aim to strengthen protections for victim-survivors while preserving fairness, legal certainty and confidence in the superannuation system.
ATO private ruling on tax treatment of termination settlement payments
In a recent PBR, the ATO ruled on payments made under a deed of release. This is a formal legal settlement agreement where the employee releases the employer from any future claims arising from the employment or its termination, after the relationship with management broke down.
In the ruling the ATO confirmed:
- No part of the payments qualifies as a genuine redundancy payment under s 83-175 ITAA 1997 (the position was not abolished or made redundant)
- The ex-gratia payment, payment in lieu of notice and signing bonus are employment termination payments (ETPs) under s 82-130
- Unused annual leave and long service leave payments do not qualify for the 30% tax offset under s 83-15 or s 83-85 (no genuine redundancy, early retirement scheme or invalidity component)
Institute of Financial Professionals Australia (IFPA) comment
Settlements documented via a deed of release following interpersonal or performance-related terminations are typically treated as ETPs (taxed at concessional rates up to the ETP cap where eligible) rather than genuine redundancies (which attract a tax-free component up to the indexed limit).
Unused leave is generally taxed at marginal rates and the concessional offset is only available in specific circumstances. When reviewing or drafting termination documentation, ensure the factual reason for dismissal is clearly recorded and aligns with TR 2009/2 to support the correct tax treatment.