Category: Accountants

Superannuation is a cornerstone of Australia’s retirement system, ensuring employees build financial security for their future. For employers, paying super correctly and on time is not optional – it’s a legal requirement. Recently, the Australian Taxation Office (ATO) has made it clear it will be stepping up compliance efforts and cracking down on businesses that fall short of their superannuation obligations.

So, what does this mean for your business, and how can you stay on the right side of the law?

Why the ATO Is Taking Action

The ATO has found that many employees across Australia have been missing out on their rightful superannuation payments. In recent years, enforcement action has led to hundreds of millions of dollars in unpaid super being recovered and transferred into workers’ retirement savings accounts.

This increased scrutiny is partly driven by the fact that unpaid super is not just a financial issue – it impacts employees’ long-term security and trust in their employers. For the ATO, ensuring compliance is about protecting workers’ rights while also maintaining fairness across the business community.

Your Superannuation Obligations

As an employer, you are legally required to:

• Pay super for eligible employees earning $450 or more before tax in a calendar month (though this threshold is being phased out).
• Pay the correct super guarantee (SG) rate, currently set at 11.5% of ordinary time earnings from 1 July 2024, and scheduled to rise to 12% by 1 July 2025.
• Make payments on time, at least quarterly, by the due dates set by the ATO.
• Submit payments through a compliant clearing house or SuperStream system to ensure they are processed correctly.

Failing to meet these obligations can result in significant penalties, including the Superannuation Guarantee Charge (SGC) – a costly alternative to simply paying super on time.

The Consequences of Non-Compliance

The ATO is investing in data-matching technology and real-time reporting to detect unpaid super quickly. Through tools like Single Touch Payroll (STP), the ATO can now compare payroll data with superannuation fund records, making it far easier to spot discrepancies.

If your business is found to be non-compliant, you could face:

• Liability for the SGC, which includes the unpaid super, interest, and an administration fee.
• Additional penalties for repeated or serious breaches.
• Reputational damage that may impact staff retention and recruitment.

Simply put, the cost of non-compliance far outweighs the cost of staying on top of your obligations.

How to Protect Your Business

Being proactive is the best approach. Here are some practical steps to ensure your business stays compliant:

1. Review your payroll systems to ensure calculations are accurate and aligned with the latest SG rates.
2. Check employee eligibility regularly, especially with changes to legislation.
3. Pay super contributions well before the due date to allow for clearing times.
4. Conduct regular audits of your superannuation payments to catch errors early.
5. Seek professional advice if you’re unsure about your obligations.

The ATO’s crackdown on unpaid superannuation is a timely reminder that compliance is critical for all Australian businesses. Beyond avoiding penalties, paying super correctly builds trust with your team and contributes to their long-term financial wellbeing.

At Glance Consultants, we work with businesses across Australia to streamline payroll, ensure superannuation compliance, and prepare for upcoming legislative changes. If you’re unsure whether your business is meeting its obligations, now is the time to act.

Get in touch with our team at Glance Consultants today to safeguard your business and your employees’ futures.

Economic roundtable wash up

Thanks for all those great ideas – we’ll take it from here.

That’s pretty much how last month’s economics/productivity roundtable wound up, with the government firmly in control of what tax policy measures might or might not be introduced down the track.

Apart from consulting with the States on a model for imposing road user charges on electric vehicles, which was already in the pipeline, there were no breakthrough tax ideas coming out of the roundtable process that are going to be implemented immediately (other than the two tiny personal tax cuts the government took to the May election and, of course, the 15% slug on large superannuation balances).

So far, at least, successive governments have been reluctant to make wealthier older Australians pay more tax, but could this be about to change?

Both the PM and the Treasurer have been somewhat coy about this.

In spite of the slim policy pickings coming out of the roundtable, Treasurer Chalmers may have planted the seeds for perhaps taking some targeted tax changes to the next election, provided such changes are supported by the broader community.

There seemed to be consensus among roundtable participants that the tax system needs to be re-examined through the lens of intergenerational equity. This will mean different things to different people, but without making politically risky changes to the GST or the tax treatment of the family home, younger working Australians can only be helped through the tax system by cutting back some of the concessions enjoyed by wealthier mainly older Australians or plunging the country even further into debt.

We would expect that between now and the next Federal election there will be continuous advocacy by civil society groups to cut back or eliminate certain tax benefits that are enjoyed disproportionately by higher income earners. This group would be the same people who already pay a disproportionate share of income taxes under our highly progressive personal income tax scales.

The wish list of changes you are likely to hear about include:

• negative gearing on rental properties;
• the CGT discount;
• the taxation of trusts;
• superannuation.

There could also be changes aimed at older Australians by way of the social security system, for example the deeming rate applied to financial assets for pension eligibility and the pension treatment of the family home.

This is a very cautious government (particularly the PM), in spite of the very substantial majority it enjoys in the Parliament. But who knows? With Millennials now slightly exceeding Boomers as a demographic, community sentiment could shift and the government might consider making some cautious moves in some of these contentious policy areas.

There is also a proposal to implement responsible measures (probably meaning tax neutral) to help boost business investment.

The two main policy levers in that area are some form of investment allowance or juicing up the Instant Asset Write Off (IAWO) rules. Investment allowances are very expensive in revenue terms as they are available in relation to capital investments businesses would have made anyway. They may act as an incentive at the margin and most businesses wouldn’t knock one back, but they should probably only be resorted to in a recession. A substantial increase in the IAWO turnover and asset cost thresholds would be welcome and, unlike an investment allowance, only creates timing differences.

In the meantime, the Productivity Commission’s (PC) controversial proposal to drop the corporate rate to 20% for entities with a turnover of less than $1 billion might have trouble getting off the ground.

It is coupled with a 5% cashflow tax, which means you can only avoid it if you keep investing in capital equipment, and there are only so many utes a business will want to buy.

And the small print shows the PC is proposing to achieve neutrality as between debt and equity financing by not taxing interest income nor allowing interest deductions at the corporate level. This will have huge implications for financing, as most incorporated businesses are net borrowers.

Finally, the PC report fails to consider the flow-on effects on distributions. Under the dividend imputation system most resident shareholders receiving distributions from a 20% company will just pay more top-up tax, with the net result of collecting slightly less company tax but more personal tax.

So, no major surprises, but keep an eye on what happens in the lead up to the next election.

With Millennials now slightly exceeding Boomers as a demographic, community sentiment could shift and the government might consider making some cautious moves in some of these contentious policy areas.

What to do if you exceed your super contribution caps

Superannuation is a great way to save for retirement, but the government sets strict limits on how much you can contribute each year. These limits are called contribution caps. If you go over them, you could face extra tax. But don’t panic – here’s what you need to know and the steps to take if this happens.

Understanding the caps

There are two main caps you need to keep in mind:

1. Concessional contributions cap
» These are contributions made before tax, such as employer super guarantee (SG) payments, salary sacrifice, and personal contributions you claim a tax deduction for.
» For the 2025/26 financial year, the cap is $30,000 per year.

2. Non-concessional contributions cap
» These are contributions made from your after-tax income, like personal contributions where you don’t claim a tax deduction.
» The cap is $120,000 per year, or up to $360,000 if you use the “bring-forward” rule (this allows you to contribute three years’ worth at once if you’re under 75).

What happens if you go over?

If you exceed either cap, the ATO will issue an excess contribution determination notice outlining your options for resolving the excess. This letter will explain what happened and tell you how much tax you’ll need to pay on the excess amount.

Your options if you exceed the concessional cap

If your concessional contributions go over the $30,000 cap, the excess amount is added to your taxable income. This means you’ll pay tax on it at your normal income tax rate, but you’ll get a 15% tax offset because your super fund has already paid tax on that money.

You have two choices:

» Withdraw up to 85% of the extra amount from your super to help cover the extra tax, or
» Leave the money in your super and pay the extra tax from your own pocket. Keep in mind, if you leave it in, the extra amount will also count towards your after-tax (non-concessional) contribution limit.

Either way, the ATO will calculate how much tax you owe, so there’s no guesswork on your part.

Your options if you exceed the non-concessional cap

If you exceed the non-concessional cap, the ATO will give you two choices:

1. Withdraw the extra contributions out
» You can withdraw the excess contributions plus any earnings they made.
» The earnings are taxed at your usual income tax rate, but you’ll get a 15% tax offset to reduce the bill.
» No extra penalty tax applies if you take the money out.

2. Leave the excess contributions in your super fund:
» You’ll pay a 47% tax on the excess amount.
» This option is rarely beneficial which is why most people choose to withdraw the extra amount to avoid the big tax hit.

Tips to avoid going over the caps

» Track your contributions: Check with your
employer and super fund to see how much has been paid in each financial year.
» Consider timing: Contributions count in the year your super fund receives them, not when you make them.
» Watch the bring-forward rule: If you use it, you can’t make more non-concessional contributions for the next two years.
» Use ATO online services: You can link your myGov account to the ATO to see real-time contribution information.

The bottom line

Exceeding your super caps can be stressful, but the ATO has a process to help you manage it. Understanding your options and acting quickly when you receive a letter will help you reduce extra tax and keep your retirement savings on track. Remember, if you’re unsure what to do, come and talk to us – we’re here to guide you through it.

CGT and off-the-plan purchases

If you buy a property in an off-the-plan purchase, there are some important CGT issues to be aware of – especially in the context that an off-the-plan purchase may not actually settle until many months or even years after the initial contract is signed.

The first thing to note is that assuming the off-the-plan purchase does proceed to settlement, then the completed property is considered to have been acquired for CGT purposes at the time (and in the income year) in which the original contract was signed – and not in the year of settlement.

And this has some important practical consequences.

The first is that for the purposes of accessing the 50% CGT discount (in the case where the property does not become your CGT-exempt home), you are taken to have acquired the property when the off-the-plan contract was signed.

And this gives you ample time to satisfy the 12-month holding rule – including where you may even sell the property within 12 months after settlement of the contract.

Secondly, and importantly, any capital gain or loss will arise in the income year in which you enter the sale contract (eg, the 2023 income year) and not in the income year that you settle that contract (eg, the 2025 income year). And this is the case even if, as is not uncommon, this contract of sale is entered into before the original off-the-plan purchase is even settled.

In short, as long as the contract is settled, the key date for determining when property is acquired (or disposed of) is the date (ie, the income year) the contract is entered into – regardless of whether settlement takes place in the next income year or in a later income year.

This means that the income year in which any capital gain or loss is returned on the sale of the property is the income year in which you enter the off-the-plan contract – even though the settlement does not take place until another income year.

However, in this case the Commissioner has a generous policy so that the taxpayer does not have to immediately return any gain in that income year – but only once the proceeds on settlement are received. And then they can go make and amend that prior year return accordingly.

Also, in the case where the off-plan purchase is to become your home, the requirement of the “building concession” must be met in order for the property to eventually be considered your CGT-exempt home.

Finally, it is important to understand that the CGT rules that apply in off-the-plan purchases are different from those that apply to an option agreement – which instead is treated a separate legal transaction with separate CGT consequences.

It is only if the option is exercised that the transaction is merged into one transaction and the CGT rules then apply in a different way.

What happens if you don’t have a valid will?

When someone passes away without a valid will, this is known as intestacy. In this situation, the law in each state and territory sets out a formula for how your estate is divided. These rules often follow a standard order – spouse first, then children, then other relatives, but they may not align with what you would have wanted.

Who usually inherits the intestate estate?

If you have a spouse and no children, your spouse will ordinarily receive the whole estate. If you have a spouse and children, whether the children receive anything depends on whether they are also the children of your spouse, as well as the laws of your state.

If you do not have a spouse or children, your estate may pass to your parents, then to siblings, and then to the next of kin, but this can vary between states.

If there are no surviving and eligible relatives, the state you live in will typically receive the estate.

Family provision

Note that even when an estate is distributed under intestacy laws, certain family members or dependants may still be able to apply to the court if they feel they have been left without proper provision. These are called family provision claims.

Eligible people – typically a spouse, partner, child, or someone dependent on the deceased, can ask the court to adjust the distribution. This process is separate from intestacy and can apply whether or not there is a will.

Exceptions to intestacy laws

Your super fund may decide which of your eligible beneficiaries receives your super, or it may pay the benefit to your estate. If your super fund allows for binding death benefit nominations, you can direct payment to an eligible beneficiary. Life insurance payouts on policies you personally own can also be directed in accordance with your wishes and may not necessarily form part of your estate. Remember jointly-owned property typically passes to the surviving joint owner.

Estate administrator

Who handles the paperwork if there’s no will? Instead of an executor named by you, the court appoints an administrator. This is often your partner or next of kin, who will collect assets, pay the estate’s debts and expenses, and then distribute the balance under the local intestacy law. Administrators step into a formal legal role and their authority begins once the court makes the grant.

Funeral and burial arrangements

One of the most pressing questions after a death is who decides on funeral arrangements. If there is no will appointing an executor, the right to organise the funeral and burial usually follows the same order as for administering the estate. It lies with the person who has the highest claim to be the administrator, typically the surviving spouse or de facto partner, or if none, the next of kin.

KEY POINT

Dying without a will means giving up control over who manages your estate, who inherits from it, and even who decides on your funeral arrangements. While intestacy laws provide a safety net, they may not reflect your personal wishes or the needs of your loved ones. Making a valid will ensures your estate is handled the way you want and spares your family unnecessary uncertainty and stress.

Deductibility of self-education expenses

Many people spend their own money on attending courses that will hopefully make them more employable and maybe earn a higher income. That’s a good thing – a workforce that is more highly skilled can lead to higher productivity, which is something that’s been in the spotlight of late.

It’s not always clear when self-education expenses are tax-deductible, and there can sometimes be a fine line between what is and isn’t deductible.

Self-education has to have a sufficient connection to earning your employment income. This will be the case if it either:

» maintains or improves the specific skills or knowledge you require for your current employment activities; or
» results in, or is likely to result in, an increase in your income from your current employment activities.

Self-education expenses incurred when a person is not employed (or self-employed) isn’t deductible.

What courses of study are eligible?

» An apprentice hairdresser working at a hair salon four days a week attending TAFE for one day is learning things at TAFE which will improve their hairdressing knowledge and skills.

» A person with a Diploma in Nursing and working as an enrolled nurse under the supervision of Registered Nurses is undertaking a Bachelor of Nursing which, on completion, is likely to increase their income as a nurse.

» A system administrator enrols in and pays for a course on how to use a particular programming language. On completion, their employer gives them a pay rise. The cost of the course is deductible since it resulted in an increase in income from the person’s current employment activities.

» A pilot working for a domestic carrier takes an aircraft conversion course to upgrade his certification to fly his employer’s international aircraft so that he will be paid more. The course qualifies as self-education since it will upgrade his qualifications and is likely to increase in his income.

What courses of study are ineligible?

» If the person studying for a Bachelor of Nursing (above example) had been working as a personal care worker instead of enrolled nurse, the necessary nexus between the course of study and their current employment activities would not be present.

Personal care workers assist patients with everyday tasks such as showering, dressing and eating. The skills and knowledge required to carry out those duties are not the same as those required to carry out a nurse’s duties.

» There was a case recently where a person who was qualified as a dentist in Romania but was working as a dental technician and studying to qualify for registration as a dentist in Australia. Despite positive comments from her employer, the Administrative Appeals Tribunal held that the two jobs were very different and the dentistry course of study was not linked closely enough to her current role as a dental technician. This would not be an uncommon situation, with many new arrivals working in roles that are well below their foreign qualifications.

» Courses designed to gain new employment are not eligible. A teacher’s aide undertaking a Bachelor of Education working with a primary school teacher and performing non-teaching duties would not qualify for a deduction since teaching students is very different from working as a teacher’s aide.

» Personal development and self-improvement courses are not generally closely enough related to a person’s current income earning activities to qualify for a tax deduction.

What deductions are allowable?

It is important that any reimbursements received from your employer are offset against any claims, and you will also need to maintain documentary evidence to substantiate your claims. And it wouldn’t hurt to have a positive statement from your employer about how participating in the course will affect the performance of your current employment duties.

Subject to the necessary connection to your existing income earning activities being established, the following deductions may be allowable:

» Tuition, course, conference or seminar fees.
» General course expenses, including text books, journals.
» The decline in value of depreciating assets – apportionment may be needed in some cases.
» Car and other transport expenses – this can range from an Uber to a nearby university to a return airfare to Paris to complete that MBA.
» Accommodation and meal expenses for when you have to be away from home overnight.
» Interest on borrowings to fund any of these outlays.

Self-education can be a tricky area, but that shouldn’t stop you from making legitimate claims. We can help you with that.

Click to view Glance Consultants September 2025 Newsletter via PDF

Running a business in Australia can be exciting and rewarding, but it also comes with financial challenges. One of the most common reasons small and medium-sized businesses struggle – or even fail – is poor cash flow management. While many business owners focus heavily on profit, it’s cash flow that determines whether you can pay your bills, meet payroll, and continue to grow. This is where cash flow forecasting becomes a game changer.

What is Cash Flow Forecasting?

Cash flow forecasting is the process of predicting how money will flow in and out of your business over a certain period – usually weekly, monthly, or quarterly. It helps you estimate future income and expenses, so you can see whether your business is likely to have enough cash to cover obligations or whether shortfalls may occur.

Unlike profit and loss statements, which look at performance over time, a cash flow forecast focuses on timing – when money will actually land in your bank account versus when it will leave.

Why Cash Flow Forecasting Matters

1. Identifies Cash Shortfalls Early
   Forecasting gives you advance warning of upcoming gaps between income and expenses. If you know a shortfall is coming, you can prepare by adjusting payment terms, organising short-term finance, or chasing outstanding invoices.
2. Supports Better Decision-Making
   Whether you’re planning to hire staff, invest in equipment, or launch a new product, a forecast can show if your business can afford the move without risking solvency.
3. Improves Relationships with Lenders and Investors
   Banks and investors want to see that you have control over your finances. A well-prepared cash flow forecast demonstrates professionalism and increases the likelihood of securing funding.
4. Helps Manage Seasonal Fluctuations
   Many Australian businesses – such as retailers during Christmas or construction companies during wet seasons – face seasonal highs and lows. Forecasting helps you plan for these cycles so you can smooth out cash flow and avoid surprises.
5. Reduces Stress and Uncertainty
   Running a business can be overwhelming when you’re unsure if you’ll have enough to cover expenses. Forecasting provides clarity and peace of mind, allowing you to focus on growth instead of firefighting financial crises.

Tips for Effective Cash Flow Forecasting

• Update Regularly: Forecasts should be living documents. Update them weekly or monthly to stay aligned with actual results.
• Be Realistic: Overestimating sales or underestimating costs can make forecasts unreliable. Use conservative assumptions.
• Monitor Debtors Closely: Track when customers actually pay, not just when invoices are issued.
• Use Technology: Cloud-based accounting software can automate much of the process, making forecasting easier and more accurate.

How Glance Consultants Can Help

At Glance Consultants, we know that cash flow forecasting can feel daunting, especially when you’re busy running day-to-day operations. Our team works with Australian businesses to set up accurate, practical forecasts that support smarter decisions. We can also provide ongoing advice, helping you adjust strategies when circumstances change.

Cash flow forecasting is more than just a financial exercise – it’s a survival tool. By giving you visibility over your future cash position, it empowers you to avoid pitfalls, seize opportunities, and build a resilient business.

If you’d like to take control of your cash flow and safeguard your business, contact Glance Consultants today.

As a small business owner in Australia, you’re likely focused on keeping your operations running smoothly, managing cash flow, and staying on top of your tax obligations. But with increasing sophistication in cybercrime and scams, it’s crucial to add another task to your list—protecting your business from tax scams.

The Australian Taxation Office (ATO) has warned businesses about the rise in tax-related fraud, especially during key periods like tax time. Scammers target small businesses by impersonating the ATO, exploiting gaps in cybersecurity, and taking advantage of time-poor operators. Here’s how to identify common scams and protect your business from falling victim.

Common Tax Scams to Watch Out For

Fake ATO Phone Calls or Emails
Scammers often pose as ATO representatives, claiming you owe a tax debt or that your ABN is at risk of being cancelled. They may demand urgent payment, often via untraceable methods like gift cards or cryptocurrency.

Red flag: The ATO will never threaten you with arrest, demand immediate payment, or ask for your financial details via email or SMS.

Phishing Emails and Texts
These messages often look official, using ATO branding and logos. They’ll ask you to click on a link to claim a refund, lodge a form, or update your information.

Red flag: These links typically lead to fake websites designed to steal your personal or financial data.

Business Identity Theft
Scammers can steal your business identity using your ABN or TFN and lodge false returns or claim refunds in your name.

Red flag: Unexpected ATO correspondence, unfamiliar tax transactions, or returns lodged that you didn’t authorise.

How to Stay Safe

Verify Communications
If you receive a suspicious message or phone call, don’t act on it immediately. Hang up or delete the message and contact the ATO directly through official channels to confirm the legitimacy.

Keep Your Systems Secure
Ensure your accounting software, anti-virus programs, and firewalls are up to date. Regularly change passwords and educate your staff about cyber risks and secure handling of financial data.

Use a Registered Tax or BAS Agent
Working with a registered accountant or tax agent, like Glance Consultants, means you have professional oversight and advice, reducing your exposure to fraudulent schemes. We can also act as a buffer between you and scammers by managing correspondence with the ATO.

Check ABN and ATO Records Regularly
Log in to your ATO Online Services or Business Portal to monitor activity. Regular checks can help you spot unauthorised changes early.

If You Think You’ve Been Scammed

Act fast. Contact your accountant or tax agent immediately. Report the scam to the ATO and, if financial loss is involved, notify your bank and the Australian Cyber Security Centre.

Stay Vigilant with Glance Consultants

Tax scams are becoming harder to spot, but staying informed and proactive is your best defence. At Glance Consultants, we help small businesses like yours navigate tax time with confidence and security. If you’re unsure about any ATO communication or need help strengthening your financial defences, we’re here to support you.

Need help? Contact Glance Consultants today.

If you’re a small business owner operating through a company, you’ve probably wondered: “Can I just transfer money from the company account to my personal one?”

The short answer? Technically yes – but not without tax consequences.

That’s where Division 7A (Div 7A) of the Australian tax law comes in. It’s one of the most commonly encountered – yet often misunderstood – areas of tax compliance for business owners. So, let’s break it down in simple terms.

What is Division 7A?

Division 7A is a set of provisions within the Income Tax Assessment Act that prevents private companies from making tax-free payments or loans to shareholders (or their associates). These rules ensure that funds taken out of a company are either treated as dividends or managed as formal loans, both of which have tax implications.

Why is this important?

Here’s the key takeaway: Money in your company belongs to the company – not you personally.

Even though you might own the business, the company is a separate legal entity. That means withdrawing company funds for personal use can attract serious scrutiny from the ATO.

The company itself may pay tax at the corporate rate of 25%, but when profits are distributed to you as a shareholder, they must generally be declared as dividends and taxed at your personal marginal tax rate – which could be as high as 45% with franking credits attached (company tax already paid).

Division 7A exists to prevent individuals from bypassing this by simply “borrowing” money from the business.

So, what happens if you take money from your company?

If you, or someone connected to you, takes money out of the company without proper structure, Division 7A could deem that amount an unfranked dividend, meaning it will be included in your taxable income – with no franking credits attached.

That’s a costly mistake.

Your Two Options Under Division 7A

If you take funds from your company for personal use, here’s what you can do to stay compliant:

1. Declare a Dividend

• Treat the amount as a dividend and declare it in your personal tax return.
• You’ll pay tax on the full amount at your marginal rate (less any franking credits).

2. Put a Compliant Loan Agreement in Place

• Create a formal loan agreement that meets Division 7A conditions.
• Repay the loan over:

• • Seven years if unsecured, or
  • 25 years if secured by a mortgage over real property.

• Make minimum annual repayments, including interest (e.g., 8.27% for FY2024).

For many small business owners, Option 2 is the preferred route as it provides more flexibility and defers the tax liability over time.

Using Div 7A with Paper Dividends: A Smarter Strategy

To avoid dipping into personal funds for loan repayments, many directors use a “paper dividend” strategy.

Each year, instead of repaying the loan out of pocket, the company declares a dividend that matches the required loan repayment. That dividend is then used to meet the Division 7A repayment obligation.

This approach can:

• Give you access to the funds upfront;
• Spread out the tax burden over several years;
• Allow income streaming (through a discretionary trust) to lower-tax-rate beneficiaries, where appropriate and compliant.

Case Study: How Division 7A Works in Practice

Let’s consider John, who owns 100% of her company, ABC Pty Ltd.

At the end of FY2024, the business has $400,000 in retained earnings. John transfers $100,000 to her personal account to pay his mortgage – without declaring it as a dividend.

His bookkeeper records the transaction as a director’s loan.

Without a compliant loan agreement, the ATO would treat this amount as an unfranked dividend. That means John could face a personal tax bill of up to $45,000.

Instead, his accountant recommends:

• Setting up a Division 7A loan agreement over seven years;
• Making annual minimum repayments (including interest);
• Declaring a paper dividend each year to cover the repayment.

In Year 1, the minimum repayment is $19,385. Rather than paying this out-of-pocket, ABC declares a fully franked dividend of that amount. John pays tax on the dividendwith the benefit of franking credits, defers the tax impact, and keeps the cash.

Even better, because the company is held via a family trust, part of the dividend is allocated to John’s retired mother – who is in a much lower tax bracket. This reduces the overall family tax bill.

Over seven years, John receives the cash today, spreads out the tax burden, and optimises who pays the tax.

Final Thoughts from Glance Consultants

Division 7A is more than just a tax technicality – it has real implications for how business owners access profits from their companies.

When used correctly, Division 7A loan arrangements can be a powerful tax planning tool.
When misunderstood or ignored, they can trigger unexpected and significant tax liabilities.

If you’re considering moving funds between your company and personal accounts – or have already done so – it’s essential to have an experienced accountant on your side to ensure you remain compliant and tax-efficient.

At Glance Consultants, we help small business owners navigate the complexities of Division 7A and create smart, compliant strategies to manage company profits effectively.

Explore Our 2025 Tax Planning Guides

We’re excited to share the 2025 Glance Consultants Tax Planning Guides with you. Designed for both individuals and business owners, these guides provide practical strategies to help you reduce your tax liabilities and maximise your deductions.

Access the 2025 Glance Consultants Tax Planning Guides here:

• Glance Consultants – 2025 Tax Planning Tips for Individuals
• Glance Consultants – 2025 Tax Planning Tips For Businesses

If you would like to book in for a tax planning consultation for FY 2024-2025 or require specialist tax and business advice, please click on Bookings.

Alternatively, you can contact our friendly team on 03 9885 9793 or email us at enquiries@glanceconsultants.com.au to book in with one of our trusted accountants.

We may need to talk about your family trust

You may have read about a recent court decision affecting some family trusts. In a case called Bendel, published on 19 February 2025, the Full Federal Court unanimously held that the private company beneficiary of a discretionary trust has not made a “loan” or “financial accommodation” to the trust merely by not calling for the payment of its trust distribution.

This item only applies to clients with business structures involving trusts that have private corporate beneficiaries where the private company has not called for payment of a trust distribution, thereby creating an unpaid present entitlement (UPE).

It’s a fine distinction, but Full Court said that in order for there to be a loan there has to be an obligation to repay an amount, which does not apply to a UPE as there is no legal obligation to repay anything.

Since 2010 the ATO has been operating on the basis that a UPE owing by a trust to a corporate beneficiary is a loan for the purposes of the Division 7A rules. These rules catch disguised distributions made by private companies to their shareholders or associates.

If the “loan” remains unpaid at the time of lodgement of the company’s tax return, the UPE amount is treated as an unfranked dividend in the hands of the trust unless the company and the trust enter into a complying loan agreement involving both capital and interest payments. This avoids the deemed dividend outcome but usually involves some tax costs and can also create funding and compliance issues for the trust.

The ATO has responded to the Full Court’s decision by seeking special leave to appeal to the High Court. The outcome of the special leave application may not be known for some months, and if special leave is granted there is unlikely to be a decision much earlier than Christmas.

In the meantime, the ATO has revised its earlier Decision Impact Statement (DIS) by announcing that it will continue to apply its existing practice of treating UPEs as loans, in defiance of the Full Court’s decision. This is not the first time the ATO has felt entitled to ignore the law of the land, and it is not something taxpayers could hope to get away with.

Even if its High Court challenge is unsuccessful, the ATO could approach the government for a law change. The previous Coalition government announced in the 2018-19 Budget that it would legislate to make it clear that corporate UPEs are caught under Division 7A. To date, nothing has been done by either side of politics to follow through on that announcement but, depending on what happens in the High Court, a legislative response cannot be ruled out.

If the Full Court’s decision stands (a big if) there will be major implications for discretionary trusts with corporate beneficiaries.

In the longer term, it would make the funding of discretionary trusts a lot easier, while also reducing compliance costs.

In view of all this uncertainty, there is the question of what to do about 2023-24 UPEs. While taxpayers would be within their rights to rely on the Full Court’s decision by not converting those UPEs into complying loan agreements, there are risks associated with that course of action which we need to discuss with you. A safer approach might be to follow the Commissioner’s approach for now and lodge objections to protect your rights.

A decision needs to be made one way or the other by the time the relevant company returns are due for lodgement, which isn’t far off.

Selling property? Buyers must withhold and pay the ATO!

If you’re selling property in Australia and you’re a foreign resident, there are important tax rules you need to know.

Recent changes mean that buyers must withhold 15% of the property’s market value and pay it to the ATO, unless the seller provides a residency clearance certificate.

What’s changed?

From 1 January 2025, all property sellers must prove their residency status by obtaining a clearance certificate from the ATO. If they don’t, the buyer is legally required to withhold 15% of the sale price and remit it to the ATO. This rule is designed to ensure foreign residents don’t avoid capital gains tax (CGT) withholding obligations. The government now assumes all property sellers are foreign residents unless they provide an ATO-issued clearance certificate proving otherwise.

How does the withholding rule work?

If you’re buying property from a foreign resident, you must:

■ Withhold 15% of the purchase price (for contracts from 1 January 2025).
■ Register as a withholder with the ATO before settlement.
■ Pay the withheld amount to the ATO before the sale is finalised.

For contracts entered before 1 January 2025, the withholding rate is 12.5%, but only applies to properties worth over $750,000.

If you’re a foreign resident selling property in Australia, you’ll receive a tax credit for the withheld amount when you lodge your Australian tax return.

What if the property is your former home?

Even if the property was your main residence, foreign residents can’t claim the main residence CGT exemption when selling Australian real estate. This means that any capital gain from the sale is fully taxable in Australia.

In fact, foreign residents are always subject to CGT on property they own in Australia – whether or not they live here.

How do you know if the seller is a foreign resident?

As a buyer, you don’t have to investigate the seller’s residency status yourself. Under standard property contracts, the seller must declare whether they are a foreign resident and provide an ATO clearance certificate if required.

If the seller doesn’t obtain a clearance certificate, the buyer must withhold 15% of the purchase price and pay it to the ATO.

Your solicitor or conveyancer will typically handle this process.

Are there any exceptions?

Yes. In some cases, the ATO may allow a reduced withholding amount – or even none at all. This happens when:

■ The foreign resident seller obtains a variation certificate from the ATO.
■ The seller is exempt from Australian tax (eg, a foreign charity).
■ A CGT rollover applies, such as in a property transfer due to a marriage breakdown.
■ The property is jointly owned by an Australian and a foreign resident – a situation becoming more common in today’s global world.

Other assets affected by these rules

It’s not just real estate – the foreign resident CGT withholding rules also apply to other assets that are closely connected to Australia such as “significant interests” in private unit trusts and companies. Whether you’re a buyer or seller, understanding these rules is crucial to avoid unexpected tax obligations. If you’re unsure how these changes affect you, get in touch with us for expert advice.

Three great reasons to start a Transition to Retirement Pension

Thinking about easing into retirement but still need a steady income? Want to trim your tax bill while growing your super? Or maybe you’d love to knock down some debt before you stop working? If you are 60 or over, you can do just that.

Who can start a super pension?

Using your super to start a pension can help give you the cashflow needed to reach your financial goals. Not everyone is allowed to start a pension but if you are 60 or over, you can. Once you retire or turn age 65 you can unlock the flexibility an account-based pension has to offer. This includes no maximum limit on how much you can take out— so long as you draw a minimum pension.

If you’re between 60 and 65 and still working, you may not qualify for a fully flexible account-based pension. However, you can start a Transition to Retirement (TTR) pension instead. While a TTR pension has some limits—like a maximum annual withdrawal of 10% of your starting balance—it can still be a powerful tool to help you achieve your financial goals. If you’re looking to supplement your income, reduce tax, or boost your super, a TTR pension could be the solution you need!

Let’s look at three typical goals.

1. Replace income while cutting back on work

Want to work less but keep the same income? A TTR pension can help!

As retirement approaches, many people start reducing their work hours—but that can mean a drop in income. By using a TTR pension, you can replace lost wages with tax-free withdrawals from your super.

Meet Theodore

Theodore (age 63) is a town planner. As Theodore nears retirement, he decides to cut back his work hours by one day a week.

That means earning less—but thanks to a TTR pension, not taking home less. His taxable income drops by $25,000, but since his pension withdrawals are tax-free, he only needs to draw $17,000 to maintain the same after-tax cashflow. Less work, lower tax, and the same income—sounds like a win, right?

2. Reduce tax and boost your super

Theodore works less and pays less tax. He is a winner but his super balance isn’t. Perhaps you would prefer more super and less tax.

A TTR pension can free up extra cash so you can salary sacrifice more into super. This means swapping taxable salary (which could be taxed at up to 47%) for concessional super contributions, which are taxed at just 15%.

Meet Matilda

Matilda (age 62) is a marine biologist and earns $160,000 per year. She starts a TTR pension with $100,000 in super and withdraws $7,075 tax-free from her pension. To receive the same amount after tax Matilda would need to earn $11,600. The extra tax-free cash from her TTR allows her to salary sacrifice $11,600 into super. The result? She saves $4,525 in personal tax and her super grows by an extra $2,785 (after super tax). That’s a win-win!

3. Pay your debt off sooner

Have some unwanted debt? A TTR pension can help you clear that debt sooner—so you can enter retirement stress-free.

Meet Simon

Simon (age 60) is a self-employed shopfitter and has $300,000 in super and a $300,000 mortgage on a holiday home (6% interest). He makes monthly repayments of $3,330 and the loan will be extinguished in 10 years (age 70).

He wants to be debt-free at retirement (age 65) so commences a TTR pension and draws down $2,470 per month ($29,640 annually). He uses the extra cashflow to make additional monthly repayments of $5,800 ($69,600 annually).

The result? Simon pays off his loan in 5 years age 65 – saving him interest and giving him peace of mind in retirement.

Is a TTR Pension right for you?

Commencing a TTR pension to reach your financial goals can be a great strategy, but it’s not for everyone. It’s important to weigh the benefits against the long-term impact on your super savings.

To make sure you’re making the right move, speak to your financial adviser. Your adviser can help you with your financial goals, be it to lower your tax, build your super, pay down debt or retire sooner!

Commencing a TTR pension to reach your financial goals can be a great strategy, but it’s not for everyone. It’s important to weigh the benefits against the long-term impact on your super savings.

FEDERAL BUDGET: STOP PRESS

In a shrewd tactical move by the government ahead of its election announcement, the modest personal tax cuts announced in the 25 March 2025 Budget have been hurriedly passed into law, as has the Bill extending the small business $20,000 Instant Asset Write-off threshold to 30 June 2025 (but not beyond that date).

The tax cuts reduce the marginal tax rate on the $18,200 to $45,000 tax bracket from 16% to 14% in two stages from 1 July 2026 and 1 July 2027, giving taxpayers up to an extra $268 a year in their pocket to start with, rising to $536 after the second stage kicks in..

Employees vs. Contractors: What sets them apart

The Australian Taxation Office (ATO) has recently revised its guidance on differentiating between employees and independent contractors. This change follows several court rulings that clarified the criteria for determining whether a worker is genuinely an employee or an independent contractor.

Whether you’re a worker or a business owner, understanding these differences is crucial, as they have an impact on tax, superannuation, and workplace entitlements.

Why does the difference matter?

How a worker is classified – either as an employee or a contractor – impacts who is responsible for paying taxes, providing benefits like superannuation and leave, and who carries legal responsibilities.

Misclassifying a worker can lead to serious financial consequences, including unpaid entitlements and penalties from the ATO.

Key differences between employees and contractors

The primary difference lies in how the worker interacts with the business:

■ Employees work in the business and are part of its operations.
■ Contractors work for the business but maintain their own separate operation.

The contract between the business and the worker is crucial in determining a worker’s classification. While day-to-day work practices play a role, the legal rights and responsibilities outlined in the contract hold the greatest significance.

The ATO’s most important considerations are laid out in Table 1 on the following page. Superannuation and contractors

Even if someone is considered a contractor, they might still be entitled to superannuation if:
■ They’re paid mainly for their labour.
■ They work as a sportsperson, artist, entertainer, or in a similar field.
■ They provide services for performances or media production.
■ They do domestic work for over 30 hours per week.

Workers who are always employees

Some workers are always considered employees, no matter what. This includes apprentices, trainees, labourers, and trades assistants.

Apprentices and trainees work while completing recognised training to earn a qualification, certificate, or diploma. They might be full-time, part-time, or even school-based and usually have a formal training agreement.

Most of these workers are paid under an award, meaning they have set pay rates and conditions.

Businesses hiring them must follow the same tax and superannuation rules as they do for other employees.

Companies, trusts, and partnerships are always contractors

If a business hires a company, trust, or partnership (rather than a person) it’s always considered a contracting arrangement. However, people working for that entity could still be employees of that entity, rather than the business hiring the services.

Why this matters to you?

For workers, knowing your status helps ensure you receive the correct pay and benefits. For businesses, classifying workers correctly helps avoid fines and ensures compliance with tax and employment laws.

If you need more details or want to check your situation, reach out to us for more information. Proper classification today can prevent costly mistakes in the future.

Concessional contributions: Can there be too much of a good thing?

A fantastic way to grow your retirement savings and shrink your tax bill is through concessional contributions (CCs) to super. But more is not always better and like Goldilocks and her porridge, it pays to get things just right.

The basics of concessional contributions

Extra CCs can be made through salary sacrifice or as personal deductible contributions (PDCs). These contributions reduce your taxable income and are taxed at 15% inside super rather than your personal tax rate. That’s a win—especially if you’re on a higher income!

When do concessional contributions lose their tax advantage?

CCs typically save you tax but there’s a point where they stop working in your favour. This happens when your taxable income drops to the effective tax-free threshold—the level where you don’t pay any tax anyway.

For the 2024/25 financial year, the effective tax-free threshold for a single person (without the Senior Australian Pensioner Tax Offset or SAPTO) is $22,575. This includes the standard tax-free threshold of $18,200 plus the Low-Income Tax Offset (LITO).

If your taxable income falls below this, making CCs won’t save you any tax—because you weren’t paying any in the first place!

What is YOUR effective tax-free threshold?

Knowing your effective tax-free threshold will help you decide how large or small your CC should be. This of course assumes you have your cashflow sorted!

The table following illustrates the effective tax-free thresholds that may apply to you depending upon your circumstance.

If your taxable income is already below your threshold, making CCs won’t reduce your tax further—but they will be taxed at 15% inside super. This means you’re losing 15% for nothing and you might be better off considering making after-tax “non concessional contributions” which aren’t subject to this “contributions tax.”

Don’t forget your catch-up concessional cap!

Haven’t been maxing out your concessional cap in previous years? No worries! If your total super balance is under $500,000, you can make extra catch-up contributions using your unused cap amounts from the past five years. You might even be eligible for up to $162,500 in catch-up CCs! That can really get your taxable income down—but remember don’t go overboard!

Watch your concessional cap and other tips

Don’t forget your employer will make CCs via super guarantee and these will also count towards your concessional cap.

Exceeding your concessional cap can mean extra tax and be an administrative headache. Also if you are on a higher income your CCs may be subject to an additional 15% tax in the form of “Division 293” tax. Play it smart and get advice!

Click to view Glance Consultants April 2025 Newsletter via PDF

Just as new financial strategies emerge from the government, the 2025–26 Federal Budget, unveiled by Federal Treasurer Dr. Jim Chalmers, presents significant updates that could impact you and your financial decisions. Delivered on 25 March 2025, the Budget is articulated around five core priorities, focusing on crucial aspects such as cost-of-living relief, housing development, and education investments. As you review these changes, pay special attention to the new personal tax cuts, increased Medicare levy thresholds, restrictions on foreign ownership of housing, and proposed reductions in student debts.

One of the standout features of the Budget is the introduction of two new personal tax cuts, which aim to enhance your financial comfort. Starting from 1 July 2026, the marginal tax rate for single taxpayers earning between $18,201 and $45,000 will decrease from 16% to 15%. Furthermore, this rate will further decrease to 14% from 1 July 2027. This progressive easing on your tax obligations could offer you substantial savings over the coming years.

The Budget also addresses healthcare affordability. It proposes an increase in the Medicare levy low-income thresholds for singles, families, and seniors, effective from 1 July 2024. This adjustment aims to ensure that more Australians can access vital healthcare services without financial strain. By raising the threshold, you may find it easier to navigate your healthcare costs.

If you’re carrying a student loan, you can look forward to a significant change as well. Starting on 1 July 2025, student loan debts will be reduced by 20%, coupled with reforms to the repayment system. This is designed to alleviate some of the financial burdens that student debt can impose on fresh graduates and those still in education.

Special attention is given to housing in this Federal Budget, with a ban on foreign individuals purchasing existing homes. This measure could impact the housing market by potentially making more properties available to Australian residents, offering you increased opportunities for home ownership. Additionally, the government plans to delay the enactment of certain tax measures until proper legislation is in place, ensuring that changes are implemented thoughtfully.

Further modifications relate to tax administration and compliance. The Australian Taxation Office (ATO) has been allocated $999 million over four years to extend its tax compliance activities, which may affect the way you engage with tax filings. Additionally, rules surrounding managed investment trusts are set to be amended, ensuring legitimate investors like you maintain access to concessional withholding tax rates starting from 13 March 2025.

Not-for-profits will also see an update, with an updated list of deductible gift recipients, providing you with more options if you choose to support charitable organizations. On the indirect taxes front, you should note that there will be a pause on indexation for draught beer excise, lasting two years from August 2025, as well as increases in excise remission caps for alcohol manufacturers, again effective from 1 July 2026.

To wrap up, the 2025–26 Federal Budget offers a comprehensive snapshot of how government policies could influence your personal finances and everyday life. By being informed and aware of these changes, you can better navigate your financial future in the year ahead.

Please check the following link for our PDF report on the 2025-2026 Budget:

Federal Budget PDF 2025-2026

It’s important to stay on top of your reporting obligations, as the Australian Taxation Office (ATO) is set to begin issuing penalties for overdue taxable payments annual reports (TPARs) starting from 22 March. If you haven’t lodged your TPAR for the 2024 financial year or previous years and have received three reminder letters from the ATO, you may be at risk of incurring penalties.

If your business pays contractors for services that fall under the taxable payments reporting system (TPRS), you are required to lodge a TPAR by 28 August each year. This requirement applies to businesses engaged in sectors such as building and construction, courier services, cleaning, information technology, road freight, as well as security, investigation, or surveillance services.

In the previous year, the ATO issued approximately $18 million in penalties to over 11,000 businesses for late or non-compliance in TPAR submissions. This demonstrates the seriousness with which the ATO views compliance with these reporting requirements.

One of the key purposes of the TPAR is to ensure that contractors report their income accurately. The ATO uses the data collected through these reports to pinpoint contractors who might be under-reporting their income. This data matching enables a fairer landscape for all businesses, ensuring that those who adhere to the regulations are not at a disadvantage against those who do not.

If you find that your business no longer needs to lodge a TPAR—perhaps because you simply do not pay contractors anymore—you can submit a non-lodgment advice (NLA) form. This form allows you to officially indicate that you are exempt from future TPAR requirements. Make sure to act promptly, as proactively addressing this matter can prevent any unwanted penalties.

In addition to monitoring TPAR compliance from businesses, the ATO also uses this data to scrutinize the tax returns filed by contractors. If they identify discrepancies, such as omitted or misreported income, the ATO may reach out to you directly or contact your tax professional. They may ask you to amend your tax return to ensure accuracy and compliance.

Through these measures, the ATO aims to level the playing field, encouraging honesty and transparency within the contracting workforce. While fulfilling your reporting obligations may seem daunting at times, it’s important to stay organized and timely in your submissions to avoid the penalty repercussions.

To summarize, ensure that your TPARs are lodged correctly and by the due date, especially if your business pays contractors for applicable services. If you need guidance on how to lodge your TPAR or how to submit an NLA form, consider consulting with your tax professional. Staying compliant not only protects your business from penalties but also contributes to a fairer taxation system for everyone involved.

Contact Glance Consultants today if you have any queries or need help with your business 

Salary Sacrifice vs Personal Deductible Contributions: And the winner is…

Super is a great way to save for retirement. It offers an opportunity to invest in long-term growth assets and enjoy generous tax concessions along the way. For those wanting to make extra contributions and reduce their personal tax bill, there are two options:

■ Salary sacrifice, and
■ Personal deductible contributions (PDCs).

Both have their benefits, and choosing the right method depends on your cash flow, flexibility needs and personal preference.

Let’s break them down.

What are salary sacrifice and personal deductible contributions?

1. Salary sacrifice

Your employer deducts a portion of your pre-tax salary and contributes it to your super fund.

2. Personal deductible contributions (PDCs)

You make voluntary contributions from after-tax money and later claim a tax deduction when you lodge your tax return.

Salary sacrifice

Benefits of salary sacrifice

■ Timing – Salary sacrifice contributions reduce your taxable income immediately, meaning your employer will withhold less tax and you will immediately enjoy the tax saving. PDCs provide a tax deduction when you lodge your tax return meaning you do not get the tax benefit until later.

■ Discipline – Salary sacrifice is automatic and helps maintain savings discipline.

■ Simplicity – Salary sacrifice can be much simpler and less administrative. PDCs require you to submit paperwork to the super fund known as a “notice of intent” form. This paperwork must be submitted within strict timeframes. With salary sacrifice you do not need to worry about such paperwork.

When salary sacrifice is a winner

Salary sacrifice is a winner for employees who:

■ Prefer a “set-and-forget” approach to growing their super.

■ Have regular income and want a simple way to contribute.

■ Want to ensure their contributions are made gradually over the year to benefit from “dollar cost averaging”. This reduces the risk of “going all in” at the peak of the market.

Personal deductible super contributions

Benefits of personal deductible super contributions

■ Availability – Salary sacrifice is only available to employees. If you are not employed, you can’t salary sacrifice. Instead, you might able to make a PDC to super.

■ Flexibility – PDCs offer greater flexibility, allowing you to contribute lump sums at any time during the financial year.

■ Reversibility – After making the contribution and submitting paperwork to claim the deduction you might change your mind.

Perhaps you have insufficient income to justify claiming a deduction and would prefer that contribution not be subject to the 15% “contributions tax”. It may be possible to “reverse” the contributions tax and not claim the deduction, but unless you have retired or met a condition of release the contribution will remain “stuck” in super.

When personal deductible contributions are a winner

PDCs are a winner for people who:

■ Want greater control over when and how much they contribute.

■ Have variable income or expect a large one-off payment (eg, bonus, inheritance, asset sale).

■ Are self-employed or receive income from multiple sources.

■ Want to contribute additional amounts closer to the end of the financial year to maximise their tax deduction.

Enjoy the best of both worlds:

Combining salary sacrifice and PDCs

Many people use both strategies to maximise their super contributions efficiently. For example:

■ Setting up salary sacrifice to contribute steadily throughout the year.

■ Making a PDC at the end of the financial year if additional concessional contribution (CC) cap space is available.

■ Adjusting contributions based on unexpected income or bonuses.

Conclusion

Salary sacrifice and PDCs each have their advantages, and the right choice depends on your employment, cash flow and personal preference.

By speaking to your adviser as to how each method works, you can make informed decisions to optimise your retirement savings while also reducing your tax bill.

Beware of Bitcoin gains!

If you own Bitcoin, or any other crypto currency, you may have been the beneficiary of Donald Trump’s election as President last November – which saw Bitcoin prices jump by almost 50% almost immediately after the election (and certainly in the following weeks).

And if you decided to take advantage of this and realise your gain by selling your Bitcoin you may have a capital gains tax (CGT) problem, and a nasty one at that (albeit, it is only a tax problem – it is not a “no-profit” problem!) .

So, if you have made a capital gain, you should consider a few things.

Firstly, the Tax Office’s data matching capabilities regarding the buying and selling of Bitcoin are very extensive (and very good) – so, any idea of just not declaring your gain would bring with it big risks.

Secondly, like anything to do with tax, keep good records of your dealings with Bitcoin: it is both a legal requirement and will help you manage your tax affairs.

Thirdly, if you also have capital losses from your dealings in Bitcoin (or any other CGT assets) in either this income year or previous ones, you can use those losses to reduce any assessable capital gains from Bitcoin – and this will result in less tax being payable.

And the same rules applies to using any current or prior-year “revenue” or trading losses you have from any other activities.

They too can be used to reduce your capital gains from Bitcoin.

Fourthly, and importantly, like most capital gains from other assets, you are entitled to use the 50% discount to reduce the amount of assessable capital gain – provided you have owned the Bitcoin for more than 12 months.

Finally, don’t forget that if you become a foreign resident for tax purposes you will be deemed to have sold your Bitcoin for its market value at the time you left the country – or the CGT rules will subject you to Australian CGT if you sell it while you are overseas. (And don’t forget about the ATO’s extensive data matching capability in this regard!)

However, all this assumes you aren’t in the business of trading in Bitcoin. If this were the case you would generally be taxed on your profits as ordinary business or other income – without the benefit of the accompanying concessions.

The other thing to be wary of is that the ATO has specific guidelines about how it treats Bitcoin and these can be difficult to apply to a particular situation.

So, if you have a “Bitcoin problem”, come and speak to us about it – and we will help you get things right (and maybe even find a legitimate way to reduce the ultimate tax payable on it).

Is an asset you own used in another person’s business?

Did you know that if you own an asset (eg, land or a factory or even a trademark) that someone else uses in carrying on a small business then you might be entitled to the CGT small business concessions when you sell the asset?

And these concessions can either entirely or partially eliminate any capital gain you make on selling it (or at least defer it).

This can occur for example when your asset is used by, say, your spouse or a child under 18 in their own business (or one that you may be involved in also) – such as where that small commercial property you own (or own jointly with your spouse) is used by your spouse in, say, that art frame, photography or accounting business etc that he or she carries on.

Typically, this concession can also apply where an asset you own is used in say the business carried on by a family company or family trust in which you have a relevant interest – although the rules can get a bit complicated where you are only a beneficiary in that family trust.

These rules can also apply in “reverse” – so that an asset owned by family company or family trust that is used in the business carried on by a relevant shareholder or a relevant beneficiary can also qualify for the CGT small business concessions (eg, farmland).

Importantly, these rules apply whether or not you lease the asset to that other person (or entity) that carries on the business.

Interestingly, the rules can also apply in appropriate circumstances where a testamentary trust continues to carry on the business that was carried on by the deceased – although in that case it may be easier to access the concessions by having the executor or beneficiary (or surviving spouse) sell the relevant business asset within two years of the deceased’s death.

These rules that allow an asset owned by one person to qualify for the CGT small business concessions where they are used by another person (or entity) in their business are only permissible where the parties are either “affiliates” or “connected entities” of each other (as defined under the tax law).

Suffice to say, whether or not persons or entities are “affiliates” or “connected entities” of each other for the purposes of the CGT small business concessions can be difficult to determine – and will depend on the exact circumstances of the relevant parties.

So, if you think you are in this situation – or propose to start a small business and intend to use assets owned by someone else in that business – speak to us first so that we can help you get the optimal CGT outcome.

FBT Checklist 2024-25

With the due date for FBT returns coming up, the following non-exhaustive checklist may prove useful in determining whether an employer has an FBT liability in the first place.

Although it will generally fall to your accountant to prepare the FBT return from your software file or other records, all of the instances where you have provided employees and/or their associates (eg, spouse) with a potential fringe benefit may not always be apparent to them. To assist you in bringing these potential benefits to the attention of your accountant, following is a general checklist to refer to.

Click to view the Glance Consultants March 2025 Newsletter via PDF