10 June 2025 to 13 June 2025
Weekly Bulletin Contents
TAX
Tuesday 10 June 2025
ATO: Flexible lodgment for those affected by NSW floods
The ATO has advised that if you or your clients have been affected by the recent NSW floods, it has a range of support options available to help you meet your obligations. The ATO says that it encourages those who can lodge on time to do so, but where lodgment is not possible, clients or agents within the declared natural disaster area as per Australian Government Disaster Recovery Payment (AGDRP) will have until 26 June to lodge the following obligations: May monthly BAS with an original due date of 21 June; Income tax returns for the 2023–24 income year for individuals and small businesses with a current lodgment due date between 29 May and 26 June 2025; and individuals and small businesses (including sole traders and trusts) that may already have a lodgment deferral for the 2023–24 income tax return; or May activity statement lodgment obligation, may lodge up to 26 June. The ATO said you won’t be penalised for lodging these obligations by the later date. If you already have a deferral, it will remain in place.
Interest rate for adjusting family law super entitlements for 2025–26
The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2025 has been made. It provides for the adjustment of superannuation entitlements that are provided under certain orders or agreements that split future superannuation benefits made in property settlements under the Family Law Act 1975. The relevant interest rate is 0.069 where the adjustment period is the financial year beginning on 1 July 2025. This is 2.25% points above the percentage change in the original estimate of full-time adult ordinary time earnings as published by the ABS for the year ending with the November 2024 reference period.
Average foreign exchange rates for May 2025
The ATO has released the average foreign exchange rates for May 2025. The rates for selected countries (equivalent to $A1): Canadian dollar – 0.8929; Chinese renminbi – 4.6488; European euro- 0.5709; Hong Kong dollar – 5.0258; Indian rupee – 54.8559; Japanese yen – 93.1518; -Malaysian ringgit – 2.7495; New Zealand dollar – 1.0841; Singapore dollar – 0.8340; South Korean won – 897.5273; Thai baht – 21.224; UK pound sterling – 0.4820; and US dollar – 0.6441.
Wednesday 11 June 2025
ATO: Changes to deductibility of interest on debts
The ATO has issued a reminder that interest incurred in income years starting on or after 1 July will no longer be deductible, regardless of whether the debt relates to an earlier income year. However, it said interest charged by the ATO that was incurred before 1 July 2025 can still be claimed as a deduction this tax time. The ATO also suggested that practitioners talk to their clients about what options they have to pay their overdue ATO debts. This could include payment plans and while general interest charge will still accrue, paying off the debt will decrease the amount of interest charged.
Tax-agent application of stay of 2 year ban refused
The ARTA has refused a tax agent’s application for a stay of the operation of the decision of the Tax Practitioners Board (TPB) to terminate his registration and imposition of two-year ban. Among other things, the TPB found that the agent failed to act honestly and with integrity and that he made false and misleading statements in his capacity as a tax agent for a family trust, and that the preparation and lodging of income tax returns included excessive or incorrect deduction claims. In arriving at its decision to refuse his application, the ARTA took into account relevant factors for granting such a stay – including the tax-agents prospect of success in challenging the primary decision terminate his registration and the imposition of the ban, the consequences for applicant of refusal of a stay and public interest consideration. At the same time, the ARTA discharged an earlier interim stay order. (Lunn and Tax Practitioners Board (Practice and procedure) [2025] ARTA 697, 3 June 2025.)
APRA: Authentication controls in super sector
APRA has advised that it has written to all Registrable Superannuation Entity licensee board chairs, reinforcing expectations around information security and the implementation of robust authentication controls. This action follows recent credential stuffing attacks that exposed persistent weaknesses in authentication practices across the super industry. APRA said it expects all RSE licensees to complete a self-assessment of their information security controls, ensure multi-factor authentication or equivalent protections are in place for high-risk activities and privileged access, and notify APRA of any material control weaknesses or breaches.
Thursday 12 June 2025
Company residency ruling updated
The ATO has advised that PCG 2018/9 Central management and control test of residency: identifying where a company’s central management and control is located has been updated. The update confirms that PCG 2018/9 may assist public companies required to produce a Consolidated Entity Disclosure Statement (CEDS) in annual financial reports. The update explains the effect on a company’s risk rating where the company self-assesses and reports as a non-resident for Australian tax purposes but has inconsistently reported as an Australian tax resident in the CEDS. The update reflects the amendments in the Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Act 2024 and has effect for financial years commencing on or after 1 July 2024.
Undeducted purchase price of pensions ruling updated
The ATO has advised that TR 2002/17 Income tax: undeducted purchase price of pensions from Austrian superannuation insurance funds has been updated to amend the tables with relevant information relating to years from 2001 onwards and make minor corrections to out of date references. The ruling deals with calculating a pension’s undeducted purchase price for determining any taxable amount of the pension. The ruling also explains how to convert Austrian to Australian currency.
New giving fund rules aim to boost charity support
The Government has announced it is consulting on new rules to ensure more money flows from charitable trusts to Australian charities. As part of these changes, public and private ancillary funds will be renamed ‘giving funds’ – which are philanthropic trusts that distribute money to Australian charities. The government is seeking feedback on two proposed changes: Increasing the minimum annual distribution rate, so more funds reach charities sooner, and allowing distributions to be averaged over three years, helping funds plan their giving more effectively. Comments are due by 1 August 2025. The consultation paper is available here.
FRIDAY 13 June 2025
Notice of Special General Meeting
A Special General Meeting (SGM) of Members of Taxpayers Australia Ltd (TAL), trading as the Institute of Financial Professionals Australia (IFPA), will be held on 4 July 2025 to consider a special resolution to amend the Constitution. Full details, instructions for registering attendance and lodging proxies, are included in the Notice of Meeting. The materials are available in the members-only section of our website here.
Validity of garnishee notice issued to purchaser of property upheld
The NSW Supreme Court has in effect upheld the validity of a garnishee notice issued by the ATO to a party that had contracted to purchase of a block of units from a taxpayer for $56m. The taxpayer owed the ATO some $27m and the garnishee notice required the purchaser to pay the settlement proceeds to the ATO. The Court arrived at its decision notwithstanding that a mortgagee (who was owed $116m by the taxpayer) would not discharge the mortgage it held over the block of units unless it received full payment of the purchase moneys on settlement of the sale. (FCT v Waitara Linx Pty Ltd [2025] NSWSC 581, 6 June 2025.)
ATO: Have your say on ATO Vulnerability Framework
The ATO has advised that it is seeking feedback from the community on its framework to help shape the way it supports people experiencing vulnerability within the tax system. Until 18 July 2025, you can view the draft ATO Vulnerability Framework on the ATO website here and provide feedback via email to [email protected].
SUPER & FINANCIAL SERVICES
1 July age pension means test thresholds increased
Many social security rates and thresholds will be indexed on 1 July 2025. This includes increases to the age pension income and asset test thresholds.
The thresholds that will apply from 1 July 2025 are outlined in the tables below.
Asset test thresholds
| Situation | Homeowner | Non-homeowner | ||
| Full pension | No pension | Full pension | No pension | |
| Single | $321,500 | $704,500 | $579,500 | $962,500 |
| Couple (combined) | $481,500 | $1,059,000 | $739,500 | $1,317,000 |
Income test thresholds
| Situation | Maximum | Cut-off |
| Single | $218 | $2,516 |
| Couple (combined) | $380 | $3,844* |
*rounded down to nearest dollar
Institute of Financial Professionals Australia (IFPA) comment
The increase in income and asset test thresholds from 1 July makes it a good time to review your client’s pension entitlement and consider strategies to increase their entitlements. Asset tested age pensioners can increase their entitlements by reducing their assessable assets. For example one popular strategy is to contribute to a younger spouse’s super who is below age pension age. Superannuation in accumulation will not be assessed against the other member’s age pension entitlement.
APRA: Authentication controls in super sector
APRA has written to all registrable superannuation entity (RSE) boards, reinforcing expectations around information security and the implementation of robust authentication controls.
APRA said it expects all RSE licensees to complete a self-assessment of their information security controls, ensure multi-factor authentication or equivalent protections are in place for high-risk activities and privileged access, and notify APRA of any material control weaknesses or breaches.
IFPA comment
In November 2024 AustralianSuper, Australian Retirement Trust, Cbus, REST, MLC Expand and Hostplus were reported to have been subject to ongoing cyberattacks seeking to steal member funds. It is understood that only members from AustralianSuper were impacted with a total of $500,000 stolen across member accounts. AustralianSuper was criticised for its limited use of multifactor authentication which is an important security measure to prevent fraud.
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.