CPA Australia Tax News

This edition of Tax News was current at the time of publication on 2 July 2026. You can subscribe to the Tax News email in your comms preference centre. 

CGT and negative gearing reforms are now law. Attention turns to the trust minimum tax.

On 25 June, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 covering the CGT discount and negative gearing changes passed both houses. CPA Australia's Senate submission and appearance before the Senate Economics Legislation Committee, backed by our compliance cost analysis ($295–542 million annually, against Treasury's own $88.4 million estimate), were central to that debate in the Senate and media. None of it would have carried weight without members flagging real-world detail.

That fight is over. The next one arguably bigger is already under way.

Seven weeks on from the Budget, the 30% minimum tax on discretionary trusts still hasn't been introduced. We're waiting on Treasury's consultation paper. Treasury's own factsheet puts 350,000 small businesses inside the affected population, with 210,000 potentially needing to change structure or distribution practice once the measure lands, currently pencilled in for 1 July 2028.

Talking to members nationally, a clear picture is emerging that doesn't match the "tax minimisation vehicle" framing this measure rests on. For most small businesses, a discretionary trust is the first structure adopted, chosen for flexibility and asset protection while profits are still uncertain, long before tax planning enters the picture. Members describe trusts flexing to match family contribution year to year, as adult children move in and out of a family farm or business, work no fixed shareholding does easily. 

Even where restructuring is the right answer, the Commonwealth's rollover relief only removes the federal tax cost, state transfer duty is untouched.

One gap has nothing to do with tax planning at all. Child maintenance trusts, established after a marriage breakdown to provide for children under section 102AG, access lower tax rates because Parliament long ago recognised this is nothing like income splitting. The Budget factsheet doesn't name these trusts in its exclusions. Left unaddressed, that's a real cut to money set aside solely for children of separated parents.

We support targeted measures closing genuine tax minimisation. Our concern is a design that, as it stands, reaches well past that target. 

If you have clients navigating this, restructuring decisions, the state duty question, or the child maintenance trust gap, we want to hear from you. 

I welcome your thoughts. Email me.

Jenny Wong
Tax Lead
CPA Australia

Decision Impact Statement: Bendel

The ATO has released its Decision Impact Statement outlining how the Commissioner will administer the law moving forward after the High Court judgment on Bendel:

• Rulings withdrawn: The ATO’s core guidance on this topic, specifically TD 2022/11 is now withdrawn. 
• Past Assessments & Private Rulings: During the litigation, the ATO held off finalising certain objections, private rulings, and amended assessments. The DIS provides the practical roadmap for how these on hold matters and historical arrangements will be finalised or unwound. 
• Residual ATO options: The ATO warns that while a standard unpaid present entitlement is safe from being deemed a loan, they will still scrutinise arrangements using other integrity measures, such as Subdivision EA (if the retained funds are subsequently loaned to individuals), Section 100A (reimbursement agreements), or Part IVA (general anti-avoidance). 

Send your comments by 19 July to [email protected]

ATO new Fast Key Code guide

The ATO has redesigned the registered agent phone line Fast Key Code system and updated Tax and BAS agent guides. 

Commonwealth penalty unit increase

The Crimes (Amount of a Penalty Unit) Instrument 2026 increases the Commonwealth penalty unit amount from $330 to $364 from 1 July 2026. The penalty unit amount is indexed on 1 July 2026 and every third 1 July after that under s 4AA of the Crimes Act 1914.

ATO website updates

• GIR XML file requirements
• Payday Super key dates

Ban on SMSF entering into LRBAs

The government has agreed and passed an amendment moved by the Greens to ban future limited recourse borrowing arrangements for residential property by superannuation funds.

The ban will commence 10 August 2026.

Company search register

ASIC’s improved companies register search service (Public Beta) makes it easier to search for companies and access key information through a clearer company profile view.

Relevant providers standard update 

ASIC has found 132 relevant providers who remained on the Financial Adviser Register who did not have any qualifications or training courses marked or only the ‘FASEA’ exam as meeting the qualifications standard. ASIC engaged with the 82 AFS licensees that authorised these relevant providers:

• 106 relevant provider records on the FAR updated they meet the qualifications standard
• 26 relevant providers ceased on the FAR.

AFS licensees and relevant providers should:

• check that the financial adviser exam (or FASEA exam), has not been incorrectly marked as meeting the qualifications standard
• check all qualifications or training courses that go toward to the relevant provider meeting the qualifications standard have been marked as such, for example only marking an ethics course is insufficient on its own
• before lodging experienced provider pathway (EPP) notifications confirm that the relevant provider is eligible to rely on the EPP.

ASIC email lodgment enabled

ASIC has now enabled 97% of paper-based forms for email lodgment. Postal lodgment remains available where preferred.

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Deduction rate for car expenses

The ATO has registered the Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026. 

The instrument sets the cents per kilometre rate at 91 cents per km for the 2026-27 income year and can only be used for up to a maximum of 5,000 business km. 

Tax Reform Bill No 1 passes both Houses and assented

The CGT and negative gearing reforms are now law. The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 was passed by the Senate with a number of amendments on 25 June 2026. 

The amendments largely related to measures that had been flagged in the media releases of the Prime Minister and the Treasurer. Notably, the Senate amendments included an amendment impacting limited recourse borrowings by SMSFs.

Tax Reform No. 2  Bill 2026 introduced

Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 has been introduced into the House of Representatives. This bill:

• makes the $20,000 instant asset write-off for small business entities permanent from 1 July 2026
• introduces a permanent loss-carry back rules for companies that are not significant global entities from 1 July 2026
• exempts employment income earned by individuals working for the PNG Chiefs rugby league team.

The bill has been referred to the Senate Economics Legislation Committee for inquiry and report by 13 August 2026.

Reasonable travel and overtime meal allowance 

Taxation Determination TD 2026/4 sets the amounts it will treat as reasonable for 2026-27 in relation to employee claims.

Date of effect: 2026-27 income year only.

Dynamic PAYG instalment method 

Draft Practical Compliance Guideline PCG 2026/D3 outlines the ATO's proposed practical compliance approach to the imposition and collection of GIC if the "dynamic PAYG instalment method" is used.

The draft guideline contains four risk zones to assist businesses in understanding whether the ATO may apply compliance resources to impose and collect GIC in relation to their PAYG instalment variations. 

For example, if a taxpayer complies with the requirements (paragraph 18) and reasonable care is taken in relation to the inputs and use of the method, compliance resources will not be applied if the PAYG instalment amount or the rate used is less than 85%.

Proposed date of effect: from 1 July 2026 for businesses participating in ATO-led pilots and from 1 July 2027 for businesses opting-in to an ATO-approved dynamic PAYG instalment calculation.

Send your comments by 13 July 2026 to [email protected]

ART decision to caution tax agents upheld

In Tax Practitioners Board v Auz Tax Pty Ltd (2026), the Federal Court dismissed TPB’s appeal against an ART decision to issue written cautions and corrective orders to two tax agents, rather than terminate their registrations. 

Application to review objection decision dismissed 

In Bouvet and FCT (2026) the ART concluded that ATO's refusal to allow a PAYG withholding credit of approximately $19.6m was not a reviewable decision, and that the taxpayer's application for review of the objection decision had no reasonable prospects of success.

GST Officials' Issues Paper submission

Our submission [TBA] broadly supports the proposed GST amendments by IR particularly where they improve certainty, reduce compliance costs and better align the rules with modern commercial practice. 

We support targeted changes to the dwelling and commercial dwelling definitions, including for transitional housing, student accommodation and Māori housing arrangements, while cautioning against broader reforms that could create new boundary issues. 

We also support practical measures to simplify GST treatment for exported residential electricity, non-resident business activity, error correction, GST group registration and pre-registration input tax deductions. However, we recommend that IR adopt clear safe harbours and proportionate transitional rules to ensure the reforms remain workable for businesses, advisers and not-for-profit providers.

Income tax returns due date

A reminder that if you are self-employed or a business owner, you need to file by the due date on 7 July to avoid penalties.

$40.7m investment in university research from lab to market

University researchers will benefit from a $40.68 million boost in government support to help commercialise their innovations, alongside new intellectual property rules taking effect from 1 July.

The initiative will begin with a pilot in 2026/27, ahead of a full investment round from 1 July 2027. The science start-up initiatives receiving government funding are:

• University research commercialisation: an additional $40.68 million over three years from 1 July 2026, delivered through the Commercialisation Partner Network programme
• Founder and Start-up Support Programme: an additional $1.4 million annually for four years from 1 July 2026 towards building a dedicated deep-tech incubation programme alongside its existing programmes, taking total annual funding to $4.1 million
• New Zealand Institute of Advanced Technology: an additional $1.4 million annually for four years from 1 July 2027 to expand the HealthTech Activator model into other advanced technology areas.

IR website updates

• 2026 Consumers Price Index 
• Increase in paid parental leave payment 

FMA sets out regulatory priorities for 2026/27

The FMA has released its second annual Financial Conduct Report, outlining progress made over the past year and its regulatory priorities for 2026/27 to continue improving outcomes for consumers, investors and businesses. 

The report outlines regulatory priorities including fraud scams consumer credit and financial advice in New Zealand. The FMA hopes to address key risks and lift conduct standards across:

• managing conflicts from remuneration structures 
• product design for new and redesigned products 
• complaints 
• fraud detection and prevention.

A transfer of responsibility for consumer credit to the FMA will occur on 1 July 2026, bringing it under a single conduct regulator for financial services. 

NZX meets market operator obligations

FMA confirms NZX met market operator obligations in 2025 review. The FMA’s annual review found NZX’s performance was underpinned by strong governance arrangements and the operational independence of NZX Regulation, as well as disciplined delivery against priorities and continued investment in market resilience. The review found:

• NZX maintained fit-for-purpose governance arrangements, fulfilling its licensed market operator obligations
• NZ RegCo provided quality regulatory oversight of NZX markets
• NZX and NZ RegCo effectively balanced strategic initiatives with core market operator responsibilities 
• NZX continued to invest in technology, risk management and market infrastructure, 
• NZX progressed on market growth initiatives, including the first full year of NZX Dark and preparations for the relaunch of S&P/NZX 20 Index Futures Contracts in April 2026.

High Court backdates charities reregistration

In Otaraua Hapū Management Committee Incorporated v Commissioner of Inland Revenue, Otaraua  sought leave to appeal out of time against its deregistration for failure to file annual returns and against the limited backdating of its re-registration.

The High Court declined leave in respect of the deregistration, finding no error and a lengthy unexplained delay, but granted leave in respect of the backdating decision.The Court exercised its broad power under s 61 of the Charities Act 2005 to backdate re-registration to avoid deregistration tax consequences. 

The compliance conditions require Otaraua to file all outstanding returns within 60 days of the judgement, with the backdating order lapsing if those conditions are not met. The Court ordered costs to lie where they fell due to the conduct of Otaraua and the Board made no error in its backdating decision

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