CPA Australia Tax News
Content Summary
- Taxation
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This edition of Tax News was current at the time of publication on April 9. You can subscribe to the Tax News email in your comms preference centre.
Alarm over CGT and foreign resident overhaul
We’ve voiced strong concerns about the federal government’s draft legislation to overhaul the foreign resident CGT and have warned the proposed changes risk undermining tax certainty and investor confidence.
The draft legislation seeks to amend key elements of the foreign resident CGT framework back to 2006. Our initial assessment is that the measures go well beyond technical clarification and instead represent a substantive shift in policy settings.
The retrospective reach of the amendments is particularly concerning for taxpayers who entered into transactions in good faith under the law as it was understood at the time. Reopening positions that are nearly two decades old could expose individuals and businesses to unexpected liabilities, including penalties and general interest charge, long after commercial decisions were made and settled.
We are also concerned about the broader implications for Australia’s reputation as a stable and predictable investment destination. Investor confidence relies heavily on certainty in the tax system. Retrospective changes of this scale may signal that tax rules can be altered after the fact, creating hesitation for foreign investors and the advisers who support them.
We have also highlighted the administrative burden the proposed amendments could create. Reassessing historic transactions is likely to increase disputes, compliance costs and resource pressures for both taxpayers and the ATO. Past experiences, such as the long running issues associated with family trust elections, demonstrate how retrospective changes in tax law or administration can generate prolonged uncertainty and inefficiency.
Compounding these concerns is the short consultation period. Stakeholders have been given just two weeks to analyse complex, far reaching reforms that affect historic transactions, long term investments and commercial structures. This timeframe is insufficient for meaningful consultation, particularly given the magnitude of the proposed changes.
As part of the same reform package, the draft legislation proposes a 50 per cent CGT discount for certain foreign residents on the disposal of qualifying Australian renewable energy assets.
We will be providing a detailed submission to Treasury and engage constructively throughout the consultation process. Any final reforms, must balance revenue protection with the fundamental principles of trust, certainty and fairness that underpin an effective tax system.
I welcome your thoughts. Email me.
Jenny Wong
Tax Lead
CPA Australia
TPB sanction power reforms
Treasury has released the anticipated proposed reforms to the Tax Practitioners Board's sanctions which will affect both people acting outside the Tax Agent Services regime and registered Tax Agents and BAS Agents.
People providing or offering tax agents services without being registered is a significant threat to the integrity of the tax system.
The proposed reforms enhance penalties imposed on such people and introduce new, criminal sanctions. The maximum amount for existing penalties which can be imposed on registered agents has been significantly increased.
If you have any comments on the draft law, you can email them to [email protected]
MTAS Tax Time 2027 (TT27) changes
The TPSG have advised that the following changes will be deployed for TT27:
• Label changes to the Trust tax return to improve data quality (slides 11 and 12 of the attachment):
– New labels to capture the details of the specified individual for FTEs and IEEs
– NOA beneficiary reference for trustee assessments
– Unpaid Present Entitlement labels
– Rateable reduction labels for franked distributions and capital gains
– Share of net financial benefit from capital gain
– Expanded non-resident beneficiary labels (interest, unfranked dividends, royalties and the total tax withheld)
• Proposed ATO data validations:
– Type of trust, trustee name, FTE status and FTE specified individual details checked against previous return
– FTE specified individual details missing despite existing FTE record
– Current year losses deducted checked against losses carried forward on previous return
– Managed Investment Trust status checked against trust type
– Share of income must equal trust estate income where there is a net income
• Removal of systems limitations enabling online lodgment for trusts with more than 200 beneficiaries.
• Development and deployment of:
- pre-fill services and nudge messaging for non-individual taxpayers
- an online simplified Trust tax return via Online Services for Business.
Review of ATO Online Services for Agents
Based on your feedback, we made a submission to the Tax Ombudsman’s review of ATO’s Online Services for Agents (OSfA) and Practice Mail.
We raised significant concerns about their performance and functionality, warning that current systems are driving inefficiencies, delays and increased risks for both tax practitioners and their clients. Read our submission here.
2026 FBT checklist
The 2026 FBT checklist is now live. Download your copy.
ATO website updates
SUPERANNUATION AND FINANCIAL PLANNING
Free workshops for sustainability reporting
ASIC and the AASB have announced joint workshops designed to provide a practical starting point for smaller and mid-size companies at the beginning of their sustainability reporting journey.
This follows ASIC's recent release of e-learning modules on the core concepts underpinning the sustainability reporting requirements.
Uplift of member protections in the super system consultation
Treasury has issued the consultation paper entitled Enhancing member protections in the superannuation system. It seeks to uplift member protections in the superannuation system.
Send your comments to: [email protected] by 11 May 2026.
CSLR reform options paper released
Treasury has released for consultation the options paper entitled Compensation Scheme of Last Resort - reform options to support ongoing sustainability. The consultation seeks feedback on targeted, technical, and structural reform options (including SMSF eligbility) for the Compensation Scheme of Last Resort (CSLR) to ensure it is meeting its intended objectives and remains sustainable for industry and consumers into the future.
Send your comments to: [email protected] by 11 May 2026.
PROFESSIONAL DEVELOPMENT
Building wealth in the tax effective super environment
21 April
In this webinar we will discuss the rules around contributions and how to maximise super contribution opportunities for your clients using practical case studies and examples.
Register now.
Year- end tax wrap 2026
Attend this two-part webinar series for a 12-month overview of all the tax changes and learn how these changes will affect you and your clients.
Register now.
RULINGS AND GUIDANCE
Practice statements updated to include consideration of vulnerability
The ATO has updated the following Practice Statements:
- PS LA 2005/2: Penalty for failure to keep or retain records – included vulnerability as an example of circumstances beyond the entity's control when considering remission (in Step 4).
- PS LA 2011/17: Debt relief, waiver and non-pursuit – included vulnerability as an example of other relevant factors to consider when making a release decision or to include when recommending waiver (in para 27 and 39).
- PS LA 2014/4: Default assessment penalty – included vulnerability as an example of circumstances beyond the entity's control (in para 43).
CASES
Appeals updates
HICKS/IERNA CASE: The High Court has refused the Commissioner special leave to appeal against the Full Federal Court decision in the Hicks/Ierna case - FCT v Hicks [2025] FCAFC 171. The Full Federal Court had dismissed the Commissioner's appeal against a decision that anti-avoidance provisions in the ITAA 1936 (s 45B and Pt IVA) did not apply to a $52 million capital reduction that was part of restructuring a business faced with serious Div 7A problems.
KILGOUR CASE: The High Court has refused the taxpayers special leave to appeal against the Full Federal Court decision in Kilgour v FCT [2025] FCAFC 183. The Full Federal Court had unanimously rejected appeals by the taxpayers against a decision that the price paid for shares (over $6 million) did not exceed the market value of those shares, with the result that the taxpayers failed to satisfy the maximum net asset value test and thus did not qualify for the small business CGT concessions.
ZIEGLER CASE: The High Court has refused the taxpayer special leave to appeal against the Full Federal Court decision in Ziegler v FCT [2025] FCAFC 168. The Full Federal Court had unanimously dismissed the taxpayer's appeal against a decision affirming an ATO determination under s 177EA of the ITAA 1936 to cancel an imputation benefit.
CHARLES APARTMENTS PTY LTD CASE: The High Court has refused the taxpayer special leave to appeal against the Full Federal Court decision in Charles Apartments Pty Limited v FCT [2025] FCAFC 180. The Full Federal Court had dismissed the taxpayer's appeal against a decision that an amount paid to the bank funding a corporate group's activities was not deductible as it was paid pursuant to a guarantee.
NEW ZEALAND TAX NEWS
Could AI swallow the accounting software market?
As sophisticated artificial intelligence “agents” take over the office, are we seeing a SaaSpocalypse? Read more to find out.
High quality financial reporting amid global uncertainty
The FMA is urging directors, preparers and auditors to maintain focus on the quality, accuracy and timeliness of financial reporting, as global volatility creates ongoing uncertainty for businesses and investors.
The call comes as the FMA releases its Financial Statements Monitoring Insights 2022–2025 report which summarises findings from reviews of 60 sets of audited financial statements as well as the reporting timeliness of all FMC-reporting entities over the past three years.
While overall standards are high, several recurring themes continue to affect the quality and clarity of financial reporting.
These include disclosures that lack sufficient transparency around key judgements, assumptions and risks; inconsistencies or gaps in explaining how significant balances are measured; and areas where entities could better communicate the basis for complex estimates.
New Zealand Tax Toolkit
The tax year in New Zealand ends on 31 March. To assist members, we publish a New Zealand Tax Toolkit consisting of 17 downloadable resources. Access the toolkit here.
Two-step verification helps contain cyber attack
The two-step verification rolled out by Inland Revenue last year has helped contain a concerted, automated effort to access myIR accounts. Last month Inland Revenue noticed a significant increase in malicious attempts to logon, with over 500,000 attempts. However, around 300 myIR accounts which did not have 2SV set up were accessed. Those 300 accounts have been closed, and IR is monitoring up to 900 accounts where a correct password was entered, but two factor authentication prevented access.
Inland Revenue is urging people not to use the same password on multiple sites and to set up two-step verification for myIR.
Cyclone Vaianu relief
Taxpayers affected by the severe weather conditions can access IR relief here:
IR website updates
RULINGS AND GUIDANCE
Sale and subdivision of land (TDS 26/03)
IR has issued a summary of a private ruling about a sale and subdivision of land. The sale was structured as a staged subdivision, with settlement and payment for each lot occurring in eight stages over 8 years.
The sale and purchase agreement (SPA) included a “lowest price” clause, stating that the agreed price is the lowest price for tax purposes under s EW 32(3). The main issue was whether the consideration payable under the SPA was the “lowest price” for the purposes of s EW 32(3) and, therefore, whether there was any financial arrangement income under subpart EW.
The Tax Counsel Office decided that the value of the land for the purposes of s EW 32(3) was the purchase price agreed in the SPA. Therefore, there was no financial arrangement income or loss under subpart EW.
Send your comments to: [email protected] by 1 May 2026.
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