Following on from the recent Federal Budget, the Bill which contains the changes to negative gearing and the CGT discount has now passed through both Houses of Parliament, but with some key amendments. This includes a ban on future limited recourse borrowing arrangements by SMSFs for investments in residential property.
Also, the High Court has handed down its decision in the Bendel case, confirming that unpaid present entitlements (UPEs) owed to corporate beneficiaries should not be considered loans for purposes of Division 7A. The decision rejects the ATO’s longstanding view that a UPE owing to a corporate beneficiary may amount to the provision of financial accommodation, and therefore a loan. The ATO has also released an updated decision impact statement which explains its response to the decision and how it plans to deal with this area, both in terms of existing UPE arrangements, existing loan agreements and future UPEs.
Change is a constant for the profession. The Knowledge Shop membership can help you and your team keep ahead of change with an advisers' help desk, workpaper knowledge base, quarterly PD, and more - wherever you are and however you are working. Book in a time for a tour or call the Knowledge Shop team on 1300 378 950.
Inside this month, Ann Dai (Tax Adviser), Michael Carruthers (Tax Director), and Amy Yan (Associate Tax Director) bring you:
Tax reform legislation passed
On 26 June 2026, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 received Royal Assent, and are now law. This means that restrictions on negative gearing and the replacement of the CGT discount with indexation (both subject to limited exceptions) are set to apply from 1 July 2027.
In order to secure the support of the Greens in the Senate the Government has agreed to some amendments to the original Bill. This includes amendments to put a ban on limited recourse borrowing arrangements for SMSFs purchasing residential property and a delay to NDIS reform process to allow for further consultation.
The Bill was also amended to lift the turnover threshold for accessing the small business 50% active asset reduction as part of the small business CGT concessions from $2m to $10m from 1 July 2027. The lower $2m threshold will still be used to determine access for the other three small business CGT concessions and there is no change to the $6m net asset value test.
While not included in the final version of the Bill, the Government has also announced that it will look to introduce further amending legislation at a later point in time to provide some relief from the new negative gearing restrictions for situations where a property (or interest in a property) is transferred to someone as a result of the death of a previous owner or relationship breakdown.
Fuel excise relief for July
The Government has announced it will extend its temporary fuel cost relief measures for another month.
The Government will continue to cut the fuel excise on petrol and diesel by 16 cents per litre from 1 July to 2 August. Further, the government will reduce the Heavy Vehicle Road User Charge by 16 cents.
Payday Super
The ATO continues to provide updated website guidance ahead of the Payday Super system starting on 1 July 2026.
For tax practitioners, the ATO has clarified some common myths:
- Payday Super changes how super is paid for contractors – No, it does not change who is owed super, only when it is due. Where a contractor is deemed an employee for super purposes, super must be paid so that it reaches their fund within 7 business days after their invoice is paid.
- Clearing houses will process payments faster under Payday Super – Not necessarily. Employers need to check their own provider's processing times. The safest way to meet the 7-business day requirement is to pay the contribution on the same day as the payday, allowing maximum time for processing. Small delays can now trigger non-compliance.
Quarter 4 super must be paid by 30 June 2026 – The old quarterly deadline still applies for this final period. Super payments for the April to June quarter must be received by the employee's super fund on or before 28 July 2026. If missed, an SGC statement and payment are due by 28 August 2026, and the late payment offset won't be available for this quarter.
Reasonable travel and overtime meal allowance amounts for 2026-27
The ATO has published TD 2026/4 which sets out the amounts that it considers as reasonable for the 2026–27 income year in respect of the substantiation exception for overtime meal allowance expenses, domestic and overseas travel allowance expenses.
For the 2026–27 income year, the reasonable amount for overtime meal expenses is $40.
For the other reasonable amounts, see the tables in the determination.
No Comments Yet
Let us know what you think