CPA Australia Tax News

This edition of Tax News was current at the time of publication on 27 August 2026. You can subscribe to the Tax News email in your comms preference centre. 

CGT: Can you explain it in 15 minutes?

Can a competent tax agent explain to a client, in 15 minutes, how the new CGT rules affect them? If not, that tells us something about the law.

Which brings me back to the test. Our CGT Tranche 2 submission shows the compounding apportionment formula pushing genuinely pre-2027 gains into the higher-taxed regime, a method meant to spare taxpayers a valuation cost, taxing them more than someone who paid for one.

CPA Australia has had a good share of mentions lately on our tax advocacy efforts. Michelle Bowes (Australian Financial Review) covered the nine-step formula and my rule of thumb: if most of your gain accrued before July 2027, get a valuation. Anthony Keane and James Gerrard (The Weekend Australian) covered the flipside, fewer than 10,000 registered valuers against millions of assets. Our $675–825 million valuation cost estimate is, if anything, conservative.

Matthew Cranston (The Australian) recently reported capital loss ordering producing higher effective rates in some super fund vehicles—the same structural flaw our submission flags, where identical investments land differently depending on the structure used. And Phillip Coorey's AFR front page drew on our discretionary trust analysis, where the binding constraint on restructuring isn't federal at all: it's state transfer duty, 92–95 per cent of cost in our NSW example.

None of this is opposition for its own sake. We accept the objectives; we're contesting design. Good tax policy is driven by evidence and consultation.

On another note, we held our second CPA Australia Tax Forum, Tax in Transition, at the Hilton Sydney on 20 August.

Thank you to the delegates who gave up a full day mid tax time—the questions from the floor were the sharpest I've seen across the cycles I've worked on this event. Thank you to our keynote speakers: Commissioner of Taxation Rob Heferen, Tax Ombudsman Ruth Owen, Treasury Deputy Secretary Diane Brown, and the Hon. David Bradbury, who takes up his APRA appointment from 1 September—we wish him well. Thanks also to Second Commissioner Kirsten Fish for her speech on AI and the AI & geopolitics panel, to the Payday Super and anti-avoidance and SME/trust taxation speakers, and to the CPA Australia team who built the day.

The Commissioner used his opening address to set out the shift from paper to phone to digital, arguing that inconsistency is the real service problem. Read it in his speech.

The timing of the Tax Ombudsman's OSfA review, released the same day, was not lost on the room. Agent satisfaction has fallen from 76 per cent in 2022 to 63 per cent in 2026, with close to 100 requested improvements still backlogged. Three recommendations; the ATO accepted all three. A simple productivity win, and a model of evidence-based review work.

Speaking of productivity, going forward there will be a standing agenda item at future ATO NTLG meetings about red tape reduction in the tax administration.

If you have ideas please email me on how red tape can be reduced in the tax system.

Jenny Wong
Tax Lead
CPA Australia

ATO: Protect your practice from cyber threats

ATO has advised that cyber criminals continue to target tax practitioner’s businesses through malicious links and attachments and is not going away, despite the warning issued two weeks ago.

Tax professionals should be cautious when interacting with unexpected communications, use multi-factor authentication, keep devices and software up to date, use anti-virus software and regularly back up important business data.

The ATO's Top cyber security tips for businesses and tax professionals provides practical advice to help protect client information and business systems. Additional guidance is also available through the Australian Cyber Security Centre's Small Business Cyber Security Guide.

TPB sets focus on misconduct

The TPB has released its 2026-27 corporate plan, stating its key priority this year will be to identify and address misconduct or unethical behaviour among tax practitioners. 

Other focus areas include:

• Reform implementation to strengthen its sanctions powers and registration framework
• Compliance and enforcement in areas such as illegal phoenix activity, tax avoidance schemes, shadow economy activity, overclaimed work-related expenses, exploitation of vulnerable Australians and failures to meet personal tax obligations
• Stakeholder engagement which includes publishing non-confidential copies of submissions and summarising consultation outcomes, and pursuing appointment of tax practitioner members unaffiliated with associations to its Consultation and Standards Forum
• Digital and AI wherein the TPB will clarify the operation of the Tax Agent Services Act 2009 (TASA) in relation to digital service providers, software platforms and AI tools, and provide guidance on their responsible use by tax practitioners.

Sentence over construction industry tax fraud

Four individuals have been sentenced by the District Court of NSW for their involvement in a $10.7 million tax fraud and money laundering scheme that exploited labour hire and payroll companies in the building and construction industry.

Input on ATO red-tape reduction

The ATO will hold as a standing agenda item in its stakeholder meetings in order to raise ideas for ATO red tape reduction and system improvement.

Email us and let us know your thoughts. Send your comments by 11 September to [email protected]

ATO website updates

• Tax Profession Digital Group
• ATO zeroes in on alcohol scheme
• AI tax guidance 

Scammers impersonating employees

The ASIC says to be alert to email spear phishing scams. This follows multiple reports of scammers targeting personnel of market operators and financial businesses.

Scammers may try to build trust by impersonating an ASIC employee and starting a conversation, using spoofing technology to make the email appear to come from a legitimate ASIC address.
ASIC urges anyone receiving a suspicious email to check that the address in the ‘from’ field ends in @asic.gov.au. 

You can verify the correspondence by calling ASIC on 1300 935 075 or sending an online inquiry.

Check for lost or unclaimed super

The ATO has called on Australians to check for lost or unclaimed superannuation, with more than $21 billion currently unclaimed.

Proposed super reforms

Treasury has released a factsheet outlining the broad reforms that the government intends to implement in the superannuation sphere.

The reforms covers: 

1. APRA-regulated funds member protections
2. SMSF-related protections
   • empowering the ATO to prevent rollovers to new SMSFs in situations where the ATO is investigating concerns of fraud, financial abuse, misconduct or potential harm.
   • introducing mandatory trustee education prior to SMSF registration and supporting initiatives to uplift standards across the sector
   • requiring SMSFs to hold uniquely identifiable bank accounts
3. Superannuation lead generation and marketing
4. Managed Investment Funds governance
5. Scaled financial advice
6. Compensation Scheme of Last Resort (CSLR)
   • Including all SMSFs as Tier 3 levy payers in the waterfall model in future years when a special levy is required.

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Tax Reform Bill No 2 passed

The Treasury Laws Amendment (Tax Reform No 2) Bill 2026 was passed by the Senate without amendment and awaits assent. 

Measures include:

• Loss carry back offset: Companies will be able to offset tax losses against tax paid in the previous two years, generating a refundable tax offset.
• $20,000 instant asset write-off: The $20,000 instant asset write-off will be permanently extended from 1 July 2026 for small businesses
• Exemption for Rugby League team: There will be a tax exemption for employees of PNG Chiefs Ltd., for income derived from 1 July 2025 to 30 June 2035 

Timeframe proposed to lodge objection

The government introduced the Administrative and Judicial Review Legislation Amendment Bill 2026 into the House of Reps on 17 August 2026. The Bill proposes to amend a section of the TAA 1953 to prescribe a timeframe of 28 days for making an application to the ART for review of decisions wherein the ATO refuses an extension of time. 

Date of effect: upon assent.

Reporting requirement on real property transfers

The Taxation Administration (Change of Reporting Period for Third Party Reports on Real Property Transfers) Legislative Instrument 2026 requires states and territories to report any transfers of freehold or leasehold interests in real property to the Commissioner of Taxation on a quarterly basis.

Date of effect: 13 August 2026

Draft guidance on crypto assets

The ATO released the following:

• TR 2026/D1: Income tax consequences for airdropped crypto assets
• TD 2026/D2: Capital gains tax consequences of using a smart contract to wrap and unwrap crypto assets

Send your comments by 21 September to: [email protected]

CGT rollover for Qoria shareholders

The ATO released CR 2026/60, ruling that if you made a capital gain from the disposal of your Qoria Limited shares, you may choose to obtain scrip for scrip roll-over for the capital gain.

Tax agent was "fit and proper person" overturned on appeal

In Tax Practitioners Board v Free (2026), the Federal Court set aside an ART decision that found a chartered accountant and a tax agent was a ‘fit and proper person’ as the ART failed to apply the correct legal test and reasoning.

The Court found that the ART had erred by relying on subjective and irrelevant considerations, rather than the statutory requirements for honesty and integrity.

IT employee's home "lab" expenses not deductible

In Hartley and FCT (2026), an employee of a communications technology company was found not to be entitled to deductions and capital allowances for his home "lab" comprising high-end IT and computer equipment.

The ART decided that the taxpayer's expenditure did not have the requisite nexus with his employment duties as required by s 8-1 or Div 40. His activities in the home "lab" were undertaken as part of his general professional interests and ongoing maintenance of skills, and not by his employer Ericsson. 

The ART also concluded that the subscriptions to The Age and Apple One were inherently private or domestic in nature.

ART has no jurisdiction to review re-raised tax debt 

In Yelda and FCT (2026), the ART determined it had no jurisdiction to review the ATO's decision to re-raise a tax debt that had been put "on-hold". 

There were no legislative provisions (in the ITAA 1997, the ITAA 1936 or the TAA) giving the taxpayer the right to object to the re-raising of the tax debt and the offsetting of the tax refunds. 

Apply for Fees Free before the end 2026 

Inland Revenue is reminding those who completed eligible tertiary study or work-based learning in 2025 to check if they qualify for government support through Fees Free. Fees Free helps with the cost of tertiary study or work-based learning by paying back some of your fees after you complete your 1st eligible qualification or programme.

If you completed an eligible programme in 2025, you apply before 31 Dec 2026. Those completing in 2026 must apply within 12 months of the date of completion.

Search tool for government funding

A new government tool allows businesses to search by sector and business purpose to find government funding opportunities that align with their goals.

Qualifying activities include developing new products and services, adopting new technologies, build workplace skills and knowledge, sustainability projects and exporting.

Council rates to be capped

Councils will be required to keep annual rates increases within a range of two to four per cent to keep rates affordable for households and businesses. 

Ratepayers nationwide have been hit with median increases of 14.2 per cent and 9.2 per cent over the past two years respectively

There will be limited circumstances where councils need greater flexibility, such as recovering from a natural disaster or responding to events outside their control. Exemptions will not be granted lightly and will only be available in exceptional circumstances where there is strong justification.

Councils will need to consider the target range from 1 July 2027 when preparing their long-term plans. 

The caps will take full effect from 1 July 2029.

Institute for Advanced Technology launched in Auckland

The New Zealand Institute for Advanced Technology (NZIAT) launched on Friday 21 August, in an effort to bring national research and development infrastructure together with Auckland’s existing commercial talent. NZIAT is New Zealand's fourth Public Research Organisation, set up to accelerate the development of advanced technologies such as AI, quantum technologies and advanced materials. 

NZIAT has already committed $71 million over seven years to the Future Magnetic and Materials Technologies Platform, hosted by the Paihau/Robinson Research Institute at Te Herenga Waka at the Victoria University of Wellington.

FMA review of add-on insurance and extended warranties

The FMA has published a review of add-on insurance and extended warranties, highlighting the need for stronger oversight of sales and distribution channels to support fair consumer outcomes. 

The report examines how insurers design and distribute products such as mechanical breakdown insurance, guaranteed asset protection insurance, payment protection insurance and extended warranties.

The review identified four key areas of concern:

• Sales practices and distribution arrangements may not consistently support informed consumer decision-making
• Consumers may purchase products that do not consistently meet their needs, objectives or expectations
• Consumers may purchase products without fully understanding them
• Insurers are not consistently identifying and responding to emerging conduct risks.

FMA Phishing Alert

The FMA reports that text messages using the FMA name and Binance branding are circulating. Do not click links or provide personal information. 

Report scam texts to 7726.

Payments by employers on the death of an employee to executors

IR issued IS 26/13: Income tax - payments by employers on the death of an employee to executors and family which considers whether amounts paid by employers on the death of an employee are taxable to the recipients, which could include executors and family members. 

IS 26/13 clarifies that while final wages are taxable, voluntary compassionate payments made by employers within 12 months of an employee's death are generally tax-free. 

The statement also considers the deductibility of payments made by employers, whether employers have PAYE obligations in respect of payments, and the duties of executors to file tax returns for the deceased employee and any estate that may arise.

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