21 July 2025 to 25 July 2025
Weekly Bulletin Contents
TAX
Monday 21 July 2025
Upcoming Economic Reform Roundtable Submission
The Institute of Financial Professionals Australia (IFPA) has lodged its submission ahead of the Government’s upcoming Economic Reform Roundtable, outlining practical measures to improve Australia’s productivity, boost business investment, and promote long-term economic sustainability.
Read our submission and media release here.
Skilled amateur poker player fails in disputing assessments
A taxpayer has been unsuccessful before the ATO in discharging the onus of proving that assessments issued to him for the 2014-2017 income years were excessive and what his taxable income should have been for those years. The taxpayer was a highly skilled amateur poker player who came to the Commissioner’s attention for his failure to lodge income tax returns for the years in question despite large sums of money flowing through his bank accounts. Before the ART he unsuccessfully claimed the amounts were explicable by his significant poker winnings as well as by the repayments of loans he says he gave to a large number of people (including fellow gamblers, family and friends). His failure to keep records, which he claimed was due to the fact that he thought his poker winnings resulted from a ‘hobby’, was also relevant. (Tran and FCT (Taxation) [2025] ARTA 1036 17 July 2025)
Tax Ombudsman finds ATO must improve letter writing
A review by the Tax Ombudsman has found that the ATO must improve the clarity and tone of the letters it sends to taxpayers to avoid unnecessary confusion, stress or anxiety. The Tax Ombudsman examined the ATO’s process for designing and testing high-volume letters and examined a sample of some of the most complex letters as part of its review. The Tax Ombudsman said that the ATO has a responsibility to engage with taxpayers in ways that make it easy to understand their obligations and any actions they need to take.
Tuesday 22 July 2025
ATO: Auditor Compliance Program results for 2024–25
The ATO has advised that it has completed more than 200 SMSF auditor reviews in 2024–25. As a result of these reviews, it referred 41 auditors to the co-regulator ASIC and 36 voluntarily cancelled their registration. The ATO said that the main reason for a referral was due to an auditor failing to comply with the auditing and assurance standards. Most auditors reviewed did not obtain sufficient and appropriate audit evidence to form an opinion on the fund’s financial statements and compliance with the super laws. The ATO also said that the most common compliance issues were a lack of evidence to support that fund transactions were at arm’s length and that fund assets were correctly reported at market value.
Proposed GST Rulings re supplies made to non-residents
The ATO has advised that the following GST Rulings will be released this week:
- GSTR 2025/1 Goods and services tax: supplies of things (other than goods or real property) made to non-residents but provided to another entity in Australia
- GSTR 2025/2 Goods and services tax: Goods and services tax: supplies of things (other than goods or real property) where effective use or enjoyment of the supply takes place outside Australia
ATO: Remote zone tax offset
The ATO has advised that it has updated its remote zone tax offset web content to make it easier to understand the eligibility requirements. The information covers: Eligibility requirements; Australian Zone lists; and How to claim the offset.
Wednesday 23 July 2025
Proceedings dismissed by ART for fail to comply with orders
A taxpayer who failed to comply with orders of the former AAT and/or to proceed with his application within a reasonable time, has had his proceedings dismissed by the new Administrative Review Tribunal (ART) under s 100 of the Administrative Review Tribunal Act 2024 in accordance with transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No 1 Act 2024 dealing with proceedings that were not finalised before new ART came into operation. However, the ART pointed out that if the taxpayer wished to do so, he may apply for reinstatement of these proceedings under s 102 of the Act. (NYKS and FCT (Practice and procedure) [2025] ARTA 1031,11 July 2025)
ATO: Changes to personal transfer balance caps
The ATO has advised that on 1 July 2025, the general transfer balance cap (TBC) was indexed, increasing from $1.9 million to $2 million – and that this increase impacts members with a personal TBC. It said members who started a pension before 1 July 2025 and haven’t previously reached or exceeded their personal cap are eligible for a proportional increase, based on their highest ever transfer balance and the amount of unused cap space, while members starting a pension for the first time on or after 1 July 2025 are entitled to a personal TBC of $2 million.
AFCA receives more than 100,000 complaints
The Australian Financial Complaints Authority has advised that it has received more than 100,000 complaints for the second year in a row and that while there was a 4% decline in complaints overall, it said was still receiving far too many. It also said that it has now had 3 years of high complaints and that “firms have more work to do to ensure fair responses to complaints are delivered earlier, without people having to take the extra step of coming to us.”
Thursday 24 July 2025
Ky Wilson Appointed CEO – Focused on Member Engagement and SupportWe’re pleased to announce the appointment of Ky Wilson as the new Chief Executive Officer of the Institute of Financial Professionals Australia (IFPA). Having served as Head of Membership and Marketing and most recently as Acting General Manager, Ky brings deep organisational knowledge and a strong commitment to meeting the evolving needs of our members. Her appointment signals an even greater emphasis on practical education, tailored advocacy, and cultivating a vibrant professional community. Ky’s priority as CEO is clear: to ensure our association provides you, the financial professionals who support Australia’s SME sector, with the resources, connections, and support you truly value. Read more on our website. |
Cutting Student Debt Bill introduced
The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 has been introduced into Parliament. It amends the Higher Education Support Act 2003, the VET Student Loans Act 2016, the Australian Apprenticeship Support Loans Act 2014, the Student Assistance Act 1973 and the Social Security Act 1991 to:
- provide a one-off 20% reduction to Higher Education Loan Program (HELP) debts in HESA, and other student loans provided under the Student Loans Acts that are incurred on or before 1 June 2025 (debt reduction measure); and
- increase the minimum repayment threshold from $54,435 in 2024-25 to $67,000 in 2025-26 (which will continue to increase each year with the growth in wages), and
- introduce a marginal repayment system where compulsory student loan repayments are calculated only on income above the new $67,000 threshold rather than having it based on a percentage of the repayment income.
Businessman fails to prove default assessments excessive
A taxpayer who carried on a wide range of businesses (including the construction and rental of student accommodation, the delivery of workplace machinery training and trading in scrap gold) has been unsuccessful before the ART in discharging the onus of proving that default assessments issued to him were excessive. The taxpayer returned losses for the 2014-2016 years of income and the ATO issued assessments for tax and penalties totalling over $3m on the basis of purported funds withdrawn from his company. In finding that the taxpayer failed to discharge his onus, the ART emphasised his failure to keep proper business records, to issue tax invoices for work he did, to keep receipts for the expenses he incurred in earning his income or to provide any analysis of his income and expenses in any of the income years. It also found that in this context that there was no basis to reduce penalties imposed for recklessness.(Dalby and FCT (Taxation) [2025] ARTA 1060, 21 July 2025)
ATO: Getting the CFC provisions right
The ATO has issued a reminder that if you have clients with a substantial interest in a foreign company controlled by Australian residents, then make sure you’re correctly applying the CFC provisions – and that this involves disclosing all CFCs, and their income, in tax returns and the international dealings schedule. The ATO also said that its reviews have shown that some tax agents don’t fully understand the provisions, putting their clients at risk of lengthy reviews and costly amendments.
FRIDAY 25 July 2025
GST Ruling re supplies made to non-residents
The ATO has released the following GST Rulings: GSTR 2025/1 Goods and services tax: supplies of things (other than goods or real property) made to non-residents but provided to another entity in Australia; and GSTR 2025/2 Goods and services tax: Goods and services tax: supplies of things (other than goods or real property) where effective use or enjoyment of the supply takes place outside Australia. These new Rulings contain substantially the same content as GSTR 2005/6 and GSTR 2007/2 (which have been withdrawn) but have been updated to: reflect the law following the amendments made by the Tax and Superannuation Laws Amendment (2016 Measures No.1) Act 2016; and modernise and simplify the previous Rulings by deleting duplicated content in the Explanation section and Examples.
Draft GST Ruling: supplies of food marketed as a prepared meal
The ATO has released GSTD 2025/1 Goods and services tax: supplies of food of a kind marketed as a prepared meal. It explains the Commissioner’s view on the circumstances in which a supply of food is not GST-free under s 38-3(1)(c) of the A New Tax System (Goods and Services Tax) Act 1999 because it is ‘food of a kind…’ ‘…marketed as a prepared meal’. The Determination follows from the decision of the Federal Court in Simplot Australia Pty Limited v FCT [2023] FCA 1115. It includes a compliance approach to assist taxpayers in classifying salad products and a transitional compliance approach for certain products up to 31 December 2025.
Goods and Services Tax Industry Issues – addendum
The ATO has released an addendum to GSTII FL1 Detailed Food List. It amends the Detailed Food List to: ensure consistency with Goods and Services Tax Determination GSTD 2025/1 Goods and Services Tax: supplies of food of a kind marketed as a prepared meal; make updates to communicate views provided in private advice and compliance engagements; and continue the ATO’s approach of modernising and streamlining the Ruling.
Addendum to Ruling re CGT event K6 (pre CGT shares and trust interests)
The ATO has released an addendum to TR 2004/18 Income tax: capital gains: application of CGT event K6 (about pre-CGT shares and pre-CGT trust interests) in section 104-230 of the Income Tax Assessment Act 1997. It amends the Ruling to: (i) reflect the view that only one capital gain may arise in circumstances where s 104-230(2)(a) and (b) of the ITAA1997 are both satisfied; and (ii) clarify which property is taken into account in calculating the capital gain under s104-230(6) of that Act. The ATO says that these matters are potentially relevant for taxpayers who sell pr–CGT shares or pre-CGT trust interests in entities that hold post-CGT property directly and indirectly through lower-tier entities. This Addendum will apply both before and after its date of issue. However, for any period prior to the issue date, taxpayers can choose to rely on either the original version of the Ruling or the amended version of the Ruling.
SUPER & FINANCIAL SERVICES
ATO Now Displays Updated Personal Transfer Balance Caps Online
The ATO has reported that they have updated their online services to display members’ revised personal transfer balance caps (TBCs), effective from 1 July 2025. Following the indexation of the general TBC from $1.9 million to $2 million, members can now view their updated personal TBC online. Agents can access their clients’ details via Online services for agents.
The updated caps reflect proportional increases for members with pensions started before 1 July 2025, who have not exceeded their personal cap, based on their highest transfer balance and unused cap space. Members starting a pension on or after 1 July 2025 are entitled to a $2 million personal TBC.
ATO Progress on Payday Super Consultation
The ATO has recently reported that they are progressing consultations on the Government’s Payday Super reform, set to start 1 July 2026. Key changes include requiring super contributions to be received by funds within 7 days of salary payments, reducing unallocated contribution return times to 3 days, and enhancing SuperStream and Fund Validation Services. Updates are available on the ATO’s Payday Super Working Group webpage. The measure awaits legislative approval.
Institute of Financial Professionals Australia (IFPA) comment
On 11 April 2025, IFPA lodged its submission on the payday super exposure draft legislation. While IFPA supports the proposed change requiring employers to pay superannuation guarantee (SG) contributions at the same time as salary and wages, we believe amendments are needed to ensure its effective implementation. For more information on our submission see our Advocacy and Media page.
Investments and Advice Complaints up 18%
In a recent media release, the Australian Financial Complaints Authority (AFCA) reported 100,745 complaints in 2024–25, a 4% drop from 104,861 the previous year. However, investments and advice complaints rose 18% to 4,193. SMSF complaints jumped 95% to 1,323, with a 124% rise in allegations of failing to act in clients’ best interests (1,266 complaints). Key points include:
- Complaint Trends: Banking and finance complaints fell 9% to 54,581, general insurance rose 17% to 34,231, superannuation dropped 16% to 6,164, and life insurance increased 5% to 1,518.
- Top Issues: Misleading product information, delays in insurance claim handling, and poor service quality were prevalent, with personal transaction accounts, motor vehicle insurance, and credit cards most complained about.
- Scam Reduction: Scam-related complaints decreased 45% to 5,977.
- Superannuation Progress: Superannuation claim handling delays fell 39%.
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 its focus. ASIC also confirmed that it is assessing the quality of financial advice to establish SMSFs.
Auditor Compliance Program Results 2024–25
The ATO reported that they reviewed over 200 SMSF auditors as part of their program to uphold audit standards. Key findings include:
- Referrals and Cancellations: 41 auditors were referred to ASIC for non-compliance, primarily due to insufficient audit evidence. 36 auditors voluntarily cancelled their registration.
- Common Issues: Lack of evidence for arm’s-length transactions, incorrect asset valuation, charges over fund assets, and non-compliant limited recourse borrowing arrangements. Many files also contained unsigned financial statements.
- Independence and Experience: Referrals were made for in-house audits and auditors lacking necessary practical experience.
- Education Efforts: 51 auditors received targeted guidance on market valuation and disqualified trustee obligations.
- Impact: Auditor compliance report (ACR) lodgments increased from 2.2% to 3.6% post-reviews.
The ATO also confirmed their continued focus on high-risk auditors in 2025-26, in-house audits, and compliance with asset valuation requirements.