27 July 2026 to 31 July 2026
Weekly Bulletin Contents
TAX
monday 27 july 2026
Penalty for failing to remit GST reduced – new residential premises
In a matter involving the failure of a partnership to remit GST in relation to the sale of “new residential premises” (and in which two of the partners lived in before its sale), the ART has ruled that the taxpayer could not rely on the “safe harbour” rules in s 284-75(6) and s 284-75(7) of Sch 1 to the TAA 1953 relieve it of its liability for a penalty of $54,000 that had been imposed for failing to remit the GST. However, the ART concluded that there should be a partial remission of the 50% penalty imposed for recklessness, down to 35%. In doing so, the ART took into account various factors including that a key partner acted honestly (albeit, badly mistaken) and the fact that the ATO did not take into account all of the relevant facts in considering remission. (BHZD and FCT (Taxation) [2026] ARTA 1376, 23 July 2026)
Taxpayer’s partial success in release from debts
The ART has partially relieved a taxpayer from his tax debt. The taxpayer was 76 years old and had a career in the film and television industry. He lodged returns late for the 2005, 2006, 2008, 2010, 2011, 2012 and 2014 income years which generated a liability of some $130,000 – plus significant amounts of GIC. After initially placing the debt on hold (on the basis of it being ‘uneconomic to pursue’ at that time) in 2016 the ATO obtained judgment for the debt, which was then around $239,000. In releasing the taxpayer from the GIC component of the debt (which amounted to about a third of it), the ART took into account the taxpayer’s capacity to repay and other matters – and said that it would “offer him the opportunity to address his remaining tax debt in a meaningful way”. However, the ART said it would not be appropriate to release him from the full debt in view of his own acknowledgement of a previous lack of attention to his tax affairs and issues of fairness to other taxpayers who have been required to meet their tax liabilities in difficult circumstances. (Barron and FCT (Taxation) [2026] ARTA 1330, 15 July 2026)
ASIC acts against SMSF auditors
ASIC has advised that it took administrative action against 36 approved SMSF auditors between January and June 2026, bringing its total actions against SMSF auditors in FY26 to 64. ASIC said the actions address serious breaches of auditor obligations and reinforce ASIC’s focus on maintaining standards among gatekeepers responsible for auditing more than $1 trillion in SMSF assets in over 672,000 SMSFs. ASIC said it took these actions for various breaches of the professional obligations of SMSF auditors, such as failing to maintain independence, non-compliance with auditing and assurance standards, non-compliance with CPD requirements, failing to maintain practical experience, failing to lodge annual statements, and/or for not being a fit and proper person to remain registered as an approved SMSF auditor
tuesday 28 july 2026
ATO: Pre-fill details ready for lodgment
The ATO has advised that it now has over 100 million pieces of information ready to be pre-filled into individual tax returns and is giving taxpayers the go ahead to lodge. The data has been provided to the ATO from a range of third parties including employers, banks, private health insurers, share registries, and government agencies and is designed to help taxpayers and tax professionals lodge more accurately and with less effort. The ATO said taxpayers with straightforward tax affairs can now review their information and start lodging, either by using myTax or through a registered tax professional.
Tax Ombudsman review of “bias in ATO decision-making”
The Tax Ombudsman has released a review entitled Bias isn’t always seen: A review into the ATO’s controls for bias in decision-making and disclosures. It follows the Tax Ombudsman’s investigation into the ATO’s management of a complex and long-running case involving allegations of maladministration and bias. The Review recommended that: the ATO should assure itself and the community that its controls against bias and prejudice in its compliance and enforcement actions and decision-making are working effectively, and the ATO should develop and implement a plan to address the identified gaps in bias controls (including strengthening explicit bias checks, training, assurance guidance and language used).
Former Commonwealth public servant charged with GST fraud
The ATO has advised that a man aged 33 has been charged for allegedly attempting to defraud the Commonwealth of more than $1.3m in false GST claims. between 2020 and 2022, following a joint AFP and ATO investigation. The former Commonwealth public servant was arrested on 30 June, 2026, by Serious Financial Crime Task Force investigators at a Broken Hill home, with assistance from the Operation Protego Integrity Taskforce and the NSW Police Force. The ATO said that this joint investigation demonstrates the Commonwealth’s zero-tolerance approach to fraud, and its commitment to upholding the highest standards of integrity and accountability.
wednesday 29 july 2026
ATO: Changes to Limited Recourse Borrowing Arrangements
The ATO has released guidance on changes to the limited recourse borrowing arrangement (LRBA) law, which apply to arrangements entered into on or after 10 August 2026.
Key points:
- LRBAs are not banned. SMSFs can still borrow under an LRBA, but an LRBA entered into on or after 10 August 2026 to purchase real property can only be used to acquire business real property (BRP). There is no change to how LRBAs operate, or to the other exceptions to the borrowing prohibition.
- All lenders are covered. The identity of the lender, whether a bank, non-bank lender or related party, does not affect whether the property must be BRP.
- BRP is required at entry and throughout. The property must be wholly and exclusively used in one or more businesses when the LRBA is entered into, and for the entire life of the LRBA. If it isn’t, the SMSF has breached the prohibition on borrowing and compliance action may apply.
- Existing LRBAs are unaffected. LRBAs entered into before 10 August 2026 are carved out, as is maintaining or refinancing them afterwards. The ATO treats refinancing as a new loan contract for the same asset, with the same or a new lender.
- Binding contracts before 10 August are also carved out. If the SMSF exchanged a binding contract to acquire the property before 10 August 2026, the changes don’t apply even if settlement or the LRBA occurs later. Significant variations to the contract may create a new arrangement.
Residential property is not automatically excluded. It can be financed under an LRBA if it meets the BRP test at entry and throughout. An SMSF can still invest in residential property that isn’t BRP, but not under an LRBA.
ATO: Tips for claiming home-based business expenses
The ATO has released information on claiming a deduction for home-based business expenses. It said that if you run your small business from home, tax time is a good opportunity to make sure you’re claiming the deductions you’re entitled to. The ATO also said that depending on your circumstances, you may be able to claim the decline in value of depreciating business assets (such as laptops, desks and office furniture). Importantly, the ATO stressed that when running your business from home, you may be liable for CGT when selling your home. However, if eligible, you may be able to reduce your CGT by applying the small business CGT concessions.
thusday 30 july 2026
Draft GSTR ruling issued – recipient created tax invoices
The ATO has issued draft Goods and Services Tax Ruling GSTR 2026/D2 which sets out the Commissioner’s view about when a recipient created tax invoice (RCTI) may be issued and the conditions that must be satisfied by the recipients issuing RCTIs. It replaces GSTR 2000/10, (which continues to apply to RCTIs issued on or before 14 June 2023). Comments due 11 September 2026.
Addenda to rulings – foreign resident capital gains withholding
The ATO has issued addenda to the following Law Companion Rulings in relation to the foreign resident capital gains withholding regime: LCR 2016/5, which provides the Commissioner’s guidance on the exercise of the variation power under the regime; LCR 2016/6, which provides guidance on the amount payable under the withholding obligation; and LCR 2016/7, which provides guidance on the application of the withholding regime to options. The addenda reflect recent amendments made to increase the withholding rate from 12.5% to 15% and to remove the $750,000 withholding threshold for taxable Australian real property or relevant indirect Australian real property interests.
Wine Equalisation Tax Ruling updated for increase in rebate
The ATO has updated the Wine Equalisation Tax Ruling WETR 2009/2 to reflect amendments made by the Treasury Laws Amendment (Supporting Choice in Superannuation and Other Measures) Act 2026 to increase the maximum amount of rebate an Australian producer can claim in a full financial year to $400,000 from 1 July 2026.
friday 31 july 2026
Hydrogen Production Tax Incentive legislative instrument
The Income Tax Assessment (Hydrogen Production Tax Incentive—Grid Matching Requirements) Instrument 2026 has been made. Its purpose is to prescribe the grid matching requirements that are intended to ensure that where renewable hydrogen is produced using renewable electricity, that electricity is connected to the same electrical grid as the hydrogen production facility, thus not creating additional demand for non-renewable electricity elsewhere in Australia.
GST information on not-for-profit activities
The ATO has released the following information on GST and not for profit activities:
- GST registration for not-for-profits – check when your not-for-profit must register for GST if your turnover is $150,000 or more;
- Claiming GST credits on reimbursements to volunteers – check when your not-for-profit, endorsed charity, gift-deductible entity or government school can claim GST credits;
- GST concessions for not-for-profits and government schools – sets out GST concessions for fund raising, non-commercial events, gifts and donations etc.
SUPER & FINANCIAL SERVICES
ATO flags new LRBA rules from 10 August
The ATO released guidance on changes to the limited recourse borrowing arrangement (LRBA) rules for SMSFs. From 10 August 2026, SMSFs are prohibited from entering into new LRBAs to acquire residential property. From that date, SMSFs can only use LRBAs to acquire business real property (BRP).
Key changes to SMSF LRBA rules
LRBAs are restricted, not banned
The changes do not prohibit SMSFs from entering into new LRBAs. However, where an LRBA is entered into on or after 10 August 2026 to acquire real property, the property must be BRP.
There are no changes to how LRBAs operate or to the other exceptions to the general prohibition on borrowing by SMSFs.
The new changes apply to all lenders
The changes apply to all LRBAs, regardless of the lender. It does not matter whether the lender is a bank, non-bank lender, related party or another entity. This means that the requirement for the real property to meet the definition of BRP applies irrespective of who the lender is.
BRP definition must be met throughout the LRBA
For an LRBA entered into on or after 10 August 2026, the property must be wholly and exclusively used in one or more businesses at the time the arrangement is entered into and must continue to meet this BRP definition for the duration of the LRBA.
Existing SMSF LRBAs are unaffected
The changes do not affect LRBAs entered into before 10 August 2026.
Existing LRBAs may continue to be maintained or refinanced on or after that date without the property needing to be BRP, provided the original LRBA was entered into before commencement.
SMSFs acquiring real property under an LRBA before 10 August 2026
The changes do not apply where an SMSF entered into a binding contract to acquire the property before 10 August 2026, even if settlement or the LRBA occurs after that date. However, if the contract is significantly altered so that its fundamental terms no longer remain, the arrangement may be treated as a new acquisition and subject to the amended rules.
ASIC: Action taken against 36 SMSF auditors
ASIC has advised that it has taken administrative action against 36 approved SMSF auditors between January and June 2026. This brings its total for FY26 to 64, a year-on-year increase. The latest actions comprised 4 disqualifications, 3 suspensions, additional conditions on 8 auditors and 21 registration cancellations. The breaches included failing to maintain independence, non-compliance with auditing and CPD requirements, and failing to lodge annual statements.