5 May 2025 to 9 May 2025
Weekly Bulletin Contents
TAX
Monday 5 May 2025
Submission on Delivering Better Financial Outcomes exposure draft legislation
On 2 May 2025, the Institute of Financial Professionals Australia (IFPA) lodged its submission on the Delivering Better Financial Outcomes exposure draft legislation. While IFPA welcomes the Government’s intent to improve the accessibility, affordability, and client-centricity of financial advice through the Quality of Advice Review (QAR) reforms, we are concerned that the draft legislation does not go far enough in addressing the structural issues that currently impede advice delivery. In some respects, it introduces further complexity rather than streamlining the system.
IFPA has made several recommendations to improve the legislation, including:
- Simplify advice documents by adopting a principles-based approach, focused on professional judgement rather than legal prescription. If written advice is required, it should be clear, practical, and easy for clients to understand. The purpose must be to inform and support the client, not to tick legal boxes.
- Introduce a fee-for-service model so members only pay for advice they use, rather than collective charging.
- Require clear disclosures where advice is limited to fund-specific products and not holistic in nature.
- Define the boundaries of trustee-provided advice, with trustees informing members to seek advice from a financial adviser where a member’s needs fall beyond their remit.
- Remove proposed civil penalties for not providing a client advice record where there’s no consumer harm.
Further details regarding our recommendations can be found in our submission and media release on our website.
Taxpayer successful in transfer pricing matter before Tribunal
The ARTA has allowed a taxpayer’s application in relation to a transfer pricing matter involving $213m in disputed tax for the years 1993 to 2009 (inclusive). Broadly, the matter involved the sale of alumina by the taxpayer from its Australian refinery to a smelter in Bahrain which involved the use of an intermediary. While the Commissioner accepted the relevant parties were arm’s length parties, he maintained that the parties were not dealing at arm’s length for various reasons. However, the ARTA found the taxpayer had satisfied the burden of proving that the assessments were excessive. While the ARTA concluded that the parties were not dealing at arm’s length with each other in relation to the supply of the alumina, nevertheless it was satisfied the consideration received by the taxpayer was not less than arm’s length consideration in respect of the supply. (Alcoa of Australia Ltd and FCT (Taxation and business) [2025] ARTA 482, 30 April 2025)
Tuesday 6 May 2025
ATO: Advice under development – super issues
The ATO has advised that it is developing advice and guidance on the following superannuation issues: advice fees paid by superannuation funds; expenditure incurred under a non-arm’s length arrangement and superannuation contributions; and administration of penalties that apply where employers or superannuation funds fail to comply with event-based reporting obligations.
NSW land tax: new website launched
NSW Revenue has advised that it has launched a new website which will feature a streamlined design, clearer information on how land tax is calculated, and faster access to essential tools like Land Tax Online. Specifically, the new features include: streamlined navigation; quick access to land tax online; practical examples; and step-by-step instructions.
Wednesday 7 May 2025
ATO information on claiming instant asset write-off
The ATO has released information on claiming the $20,000 instant asset write-off in the 2024-25 income year. The ATO said that if your business has an aggregated annual turnover of less than $10m and uses the simplified depreciation rules, you may be able to use the instant asset write-off to immediately deduct the business part of the cost of eligible assets.
The ATO said the key rules are: the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose between 1 July 2024 and 30 June 2025 can be claimed; new and second-hand assets can qualify – although some exclusions and limits apply; if you claimed an immediate deduction for an asset’s cost under the simplified depreciation rules in an earlier income year, you can also immediately deduct the first improvement cost for that asset if it is incurred between 1 July 2024 and 30 June 2025 and less than $20,000; and, the $20,000 limit applies on a per-asset basis, so you can instantly write off multiple assets as long as the cost of each asset is less than the limit.
Note: As part of its election proposals, the Labor Party said it would extend the $20,000 instant asset write-off to 30 June 2026.
ATO: Advice under development –CGT issues
The ATO has advised that it is developing advice and guidance on the following capital gains tax (CGT) issues: Back-to-back CGT rollovers [updated]; Application of CGT event K6; Deceased estates: ‘double death’ [updated]; and Deceased estates: right to occupy [updated].
Thursday 8 May 2025
ATO: Areas of focus this tax time
The ATO has advised that this “tax time” it will be focused on areas it sees frequent errors, including work-related expenses, working from home deductions and where there are multiple income sources. It issued a reminder that work-related expenses must have a close connection to income earning activities, and that they should be backed up with records like a receipt or invoice. The ATO also said that if deductions don’t pass the ‘pub test’, it’s highly unlikely the claim would meet the ATO’s strict criteria. The ATO also said that don’t fall into the trap of thinking a person can claim expenses like travel to and from work and childcare costs as these expenses are personal in nature and cannot be claimed.
Second Commissioner speech on trust and tax administration
The ATO has released a recent speech given by Second Commissioner, Jeremy Hirschhorn, in which he spoke on the issue of “trust” (particularly in an AI environment). He discussed the following matters: The trust given to tax administrators to perform a vital function: to fairly collect tax so that Governments can provide services to citizens; the powers given to the ATO to access sensitive financial information about people, as well as powers of enforcement; the fact that this sensitive information is not only shared but compulsorily shared; and, the need for the tax administrator to be worthy of that trust.
FRIDAY 9 May 2025
Taxpayer satisfies onus of proving that there was no evasion
The ARTA has found that a taxpayer had discharged the burden of proving that he had not engaged in “evasion” in relation to amended assessments issued to him out of time in respect of undeclared income from the UK of some $8m. The taxpayer had lodged his returns for the 2006-2008 income years on the basis that he was not a resident of Australia for tax purposes and therefore his income from the UK was not included in his return. In finding, that the taxpayer had not engaged in “evasion” in lodging his returns on that basis (and that he was therefore entitled to the benefit of the time limit for amendment of assessments), the ARTA found, among other things, that various factors and contemporaneous documents were consistent with the taxpayer having an intention, when he left Australia in 2005, to live indefinitely in and make his home in the UK.
Note: The taxpayer also lodged his UK returns for those years on the basis that he was not a UK resident and therefore none of his UK-sourced income was brought to account in either jurisdiction. (Kirtlan and FCT (Taxation) [2025] ARTA 539, 8 May 2025)
Assets forfeited in gold bullion GST fraud matter
The ATO has reported that two Sydney-based leaders of an Australian criminal syndicate have been forced to forfeit more than $8.7m in assets for their roles in an elaborate gold bullion GST fraud. Orders made by the Supreme Court of NSW resulted in those assets being forfeited to the Commonwealth. The ATO said it followed a complex, decade-long AFP-led Criminal Assets Confiscation Taskforce (CACT) investigation, codenamed Operation Nosean and that CACT brings together the resources and expertise of the AFP, Australian Border Force (ABF), the ATO, Australian Criminal Intelligence Commission (ACIC) and AUSTRAC. The CACT investigation began in 2012 after intelligence highlighted the apparent purchase of notably high quantities of pure gold bullion – known as PAMP gold – from a broker in Sydney. The ATO said that this intelligence suggested the gold was being used for large-scale GST fraud.
SUPER & FINANCIAL SERVICES
Delivering Better Financial Outcomes Submission
Following the Federal Election, the re-elected Government is anticipated to continue with its financial advice reform agenda by seeking to legislate the second tranche of the Delivering Better Financial Outcomes (DBFO) package.
Draft legislation proposes to:
- Replace Statements of Advice with Client Advice Records
- Allow superannuation funds to collectively charge members for financial advice
- Allow superannuation funds to prompt members to consider making changes
Details on the proposed “new class” of adviser and changes to the best interests duty are still under construction.
Institute of Financial Professionals Australia (IFPA) comment
On 2 May 2025, the Institute of Financial Professionals Australia (IFPA) lodged its submission on the Delivering Better Financial Outcomes exposure draft legislation. While IFPA welcomes the Government’s intent to improve the accessibility, affordability, and client-centricity of financial advice through the Quality of Advice Review (QAR) reforms, we are concerned that the draft legislation does not go far enough in addressing the structural issues that currently impede advice delivery. In some respects, it introduces further complexity rather than streamlining the system.
IFPA has made several recommendations to improve the legislation, including:
- Simplify advice documents by adopting a principles-based approach, focused on professional judgement rather than legal prescription. If written advice is required, it should be clear, practical, and easy for clients to understand. The purpose must be to inform and support the client, not to tick legal boxes.
- Introduce a fee-for-service model so members only pay for advice they use, rather than collective charging.
- Require clear disclosures where advice is limited to fund-specific products and not holistic in nature.
- Define the boundaries of trustee-provided advice, with trustees informing members to seek advice from a financial adviser where a member’s needs fall beyond their remit.
- Remove proposed civil penalties for not providing a client advice record where there’s no consumer harm.
Further details regarding our recommendations can be found on our website.
ATO Launches Centralised SMSF Audit Guidance Hub for Professionals
The ATO has streamlined access to essential Self-Managed Super Fund (SMSF) audit resources with the launch of its refreshed Auditing an SMSF webpage QC45565, tailored for SMSF auditors and tax professionals. The hub consolidates key guidance to support auditors in meeting their obligations efficiently.
The updated webpage covers critical topics, including:
- Verifying asset values
- Conducting financial and compliance audits
- Maintaining auditor independence
- Reporting contraventions
- Handling rollovers and downsizer contributions
- Auditing SMSFs during wind-up
IFPA comment
IFPA welcomes the ATO’s refreshed Auditing an SMSF webpage (QC45565), a streamlined resource hub supporting SMSF auditors with clear guidance on compliance obligations. We encourage the ATO to enhance the hub with practical case studies and regular updates to address emerging complexities, ensuring auditors can deliver high-quality outcomes.