Juggernaut Advisory

SMSF Investment Strategy: Why Regular Reviews Matter

Team Juggernaut — Mon, 05 Oct 2026 06:50:03 +0000

SMSF investment strategy reviews are an important part of managing an SMSF and ensuring the fund continues to meet its legal obligations and members’ retirement needs.

Superannuation law requires trustees of SMSFs to formulate, regularly review and give effect to an investment strategy that has regard to the whole of the circumstances of the fund. Although there is nothing in the law stating a timeframe that may define ‘review regularly’, it is commonly accepted that this would be at least annually. This aligns with comments on the ATO’s website where they expect reviews to occur at least annually.

Some trustees will undertake an annual review leading up to, or at the beginning of a new financial year, while others will undertake the review as part of reviewing the completed financial accounts from the previous financial year. Neither is the right or wrong option, and you must consider what is best for your situation.

Either way, you will need to be able to show your fund’s auditor that you have reviewed the investment strategy and documented any decisions made, whether it be recording changes deemed necessary or determining the existing strategy remains appropriate.

There may be other times that it is appropriate to review the investment strategy. These may include when:

There is a market correction;
A member joins or leaves the fund;
A member starts a pension in the fund.

An investment policy will generally be comprised of two parts:

Investment objective – this part outlines the fund’s objectives and expected outcomes. For example, an objective may be to achieve a certain level of return over a certain period. This would generally take into account the age of the members, their retirement needs and investment risk profile.
Investment strategy – this part outlines how the fund will achieve the stated objectives. For example, it may include investment asset ranges or specific assets that will be held.

When reviewing your fund’s investment strategy, consideration must be given to:

The risk of holding particular investments and their returns, with regard to the fund’s objectives and expected cash flow requirements;
Composition of investments and the risk of inadequate diversification;
Liquidity of investments, with regard to expected cash flow requirements;
Ability to discharge existing and prospective liabilities; and
Whether insurance cover for one or more members should be held by the fund.

Although these points need to be considered, it is up to the trustees to determine how they are applied, based on the circumstances of the fund.

As an example, you must consider the diversification of the fund’s assets, but that does not mean you are required to have a diversified investment strategy. Many funds hold just a property and a bank account, and this may be appropriate for those funds. However, the trustees should document what consideration they gave to diversification, why the lack of diversification is appropriate and why they have chosen these particular assets.

Likewise, there is no legal requirement to hold insurance cover for the members, but you do need to document that it has been considered.

As noted above, a member starting a pension may be a reason to review the fund’s investment strategy. This is due to the fact that this is likely to change the liquidity considerations and investment profile of the fund. When members are all in the pre-retirement growth phase, expenses are usually more predictable, and there isn’t a need for many funds to hold large cash reserves. Once members reach the point they are accessing their benefits, as either pension or lump sum payments (or both), cash flow, liquidity and a potential cash buffer become a more important consideration.

It is not uncommon that leading up to the end of any given financial year we will field enquiries and concerns from trustees that do not have the cash to satisfy even the minimum pension requirements for the year. While there may be several reasons for this, it should raise questions about the appropriateness of the fund’s current investment strategy and considerations as to whether a review of the asset holdings is warranted.

If we revisit the one property and one bank account funds mentioned earlier, this may have been a reasonable strategy during the growth phase, but does it remain so during the drawdown phase?

Although many people are comfortable with property and Australian investors in general have an affinity for the old bricks and mortar, this does not mean it is an appropriate investment in all circumstances. If the rental income from the property cannot support your retirement needs and minimum pension withdrawal requirements, something needs to change. This will hold true for any other investment that may not be easily sold, such as holdings in unlisted companies and trusts.

Reviewing your fund’s investment strategy and giving consideration to the needs of the members and the asset holdings of the fund should not be seen as just a tick-a-box legal requirement. You’ve worked hard to build your retirement wealth, and when the time comes, you want to be able to enjoy it. Having an appropriate investment strategy that will allow this is an important element of running an SMSF. Have you reviewed your strategy lately?

If you have any questions in relation to any of the above, please contact usto discuss further.

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Lost Super: How to Find and Claim Your Superannuation

Team Juggernaut — Thu, 01 Oct 2026 23:50:00 +0000

Lost super could be waiting for you, with more than $21 billion in lost and unclaimed superannuation currently held across Australia.

More than $21 billion in lost and unclaimed superannuation is currently sitting idle across Australia, according to the latest ATO figures. The average lost account holds around $41,000. Last year alone, the ATO reunited more than $1.1 billion with members.

That is real money that could be working harder for your retirement. Tax time is the natural moment to check whether any of it belongs to you.

How super becomes “lost”

Super generally becomes lost when an account becomes inactive, and the fund can no longer contact the member. Common triggers include:

Changing jobs and leaving an old account behind
Moving house or updating your phone number without telling the fund
Changing your name

When the fund cannot reach you, the account may be classified as lost. In some cases, the balance is eventually transferred to the ATO to hold until the rightful owner claims it. The money does not disappear; it simply sits waiting to be reunited with its owner.

A five-minute health check

Finding lost super is straightforward and free. The quickest way is through ATO online services via myGov:

Log in to myGov and open the ATO section.
Select Super, then Fund details.
You will see any active accounts plus any lost or ATO-held super linked to your tax file number.

You can also use the ATO app or call the automated lost super search line on 13 28 65. A paper form is available if you prefer.

Many people are surprised by what turns up from old accounts from early jobs, small balances that have grown over time, or larger amounts they had completely forgotten about.

Especially valuable if you are approaching retirement

For clients still decades from retirement, finding lost super is useful. For those at or approaching retirement age, it can be particularly meaningful. An extra $20,000 or $40,000 (or more) can make a noticeable difference to the size of the nest egg available to draw on. Even smaller amounts compound further once consolidated into a single active account that continues to earn returns and attract any future contributions.

One important practical warning before you consolidate

If you decide to roll multiple accounts into one preferred fund, check the insurance cover attached to each account first. Death, total and permanent disability, or income-protection cover that comes with a super account can sometimes end when the balance is rolled over. Losing that cover without realising it can leave a gap in your protection at the exact time you may need it most. Speak with your fund or adviser before consolidating so you understand exactly what will transfer and what will not.

The commercial upside is simple

Every dollar sitting in a lost or low-balance account is potentially earning less than it could, or incurring unnecessary fees. Bringing the money into one active account usually reduces fees, improves investment choice, and makes it easier to keep track of your overall position. The ATO’s reunification figures show that when people do the search, meaningful amounts are regularly returned.

The process takes only a few minutes and costs nothing. Given that more than $21 billion is currently waiting to be claimed, the odds that some of it belongs to you are higher than many people expect.

You can start the free search here:

https://www.ato.gov.au/forms-and-instructions/superannuation-searching-for-lost-superannuation

If you would like help interpreting what you find, or advice on whether consolidation makes sense in your circumstances (including the insurance check), just get in touch. A short conversation now can put money back into your retirement savings that might otherwise stay forgotten.

If you have any questions in relation to any of the above, please contact us to discuss further.

The post Lost Super: How to Find and Claim Your Superannuation appeared first on Juggernaut Advisory.

Widow Tax Fixed: What the New Rules Mean for Property Owners

Team Juggernaut — Thu, 01 Oct 2026 22:54:00 +0000

Widow tax has been addressed through changes to the recent negative gearing and capital gains tax reforms, protecting certain property owners after death or relationship breakdown.

Federal Parliament has closed an unintended loophole in the recent negative gearing and capital gains tax reforms that became widely known as the “widow tax”. At the same time, the Government also fixed a technical issue that could have affected people who first use a main residence to generate rental income after Budget night on 12 May 2026.

What the problem was

As you might be aware, the tax rules have recently been changed to ensure that losses generated from residential rental properties from 1 July 2027 can be ‘quarantined’. This means that they can only be offset against income or capital gains generated from other residential rental properties. However, the changes won’t generally apply to properties that were purchased by the relevant taxpayer before 12 May 2026.

However, a problem could arise when an ownership interest in a property passes to someone as a result of the death of the original owner or because of a relationship breakdown, and this occurs after 12 May 2026. Under the original version of the new rules, that transfer could be treated as a new acquisition. This could have meant that a surviving spouse or former partner risked losing the protected negative gearing treatment that had applied to the property in the hands of the previous owner.

How it was fixed

The Government moved quickly once the issue was identified. Some new rules now specifically protect people who acquire a residential property interest from a spouse because of death or relationship breakdown. The rules can also potentially protect someone who inherits an additional ownership interest in a rental property from a co-owner who isn’t their spouse.

Case study 1 – the widow tax fix

Sarah and David bought a rental unit in 2019 as equal joint owners. The property has always been negatively geared, with annual rental losses of around $8,000 offset against their other income each year.

Under the original May 2026 reforms, the property was protected because it was acquired well before Budget night. However, if David had died and the property transferred fully into Sarah’s name, the additional 50% interest that Sarah inherited from David’s estate risked being treated as a new acquisition. Sarah could have lost the ability to claim the losses generated from this interest in the property against her other income.

With the updated rules now in place, that outcome is avoided. Because the transfer occurs due to the death of a spouse, Sarah keeps the original protected treatment and can continue offsetting the rental losses in the same way as before.

Former main residences

A related technical issue also needed fixing. Under the original rules, there was a risk that an existing main residence purchased before 12 May 2026 could lose its protected status if it was later first used to generate taxable rental income after that date. This was because of the interaction with a long-standing tax rule that can treat someone as if they had reacquired a former main residence when it is first used to produce income.

The Government has now passed legislation to correct this. The new rules specifically disregard that “first use to produce income” rule when determining the acquisition date for negative gearing purposes.

Case study 2 – renting out a former home

James bought his home in 2018 and has lived in it as his main residence ever since. In 2027, he decides to move in with his partner and rent the property out for the first time.

Under the original drafting of the 2026 reforms, first renting the property after 12 May 2026 risked resetting its acquisition date. That could have caused the property to be treated as a post-Budget night acquisition and subjected to the tighter negative gearing limits.

With the new rules now in place, that reset is disregarded for negative gearing purposes. Because James originally acquired the property before 7:30 pm on 12 May 2026, it keeps its original acquisition date. He can continue to offset any rental losses in the same way as if the property had always been an investment property acquired before Budget night.

Why these fixes matter

Both changes remove sources of unexpected cash-flow disruption. The “widow tax” fix protects people at a difficult personal time. The main residence clarification gives homeowners greater flexibility if their circumstances change and they later decide to rent out a property they already own.

What you should do now

If you own a jointly held investment property acquired before 12 May 2026, the “widow tax” fix provides reassurance that a future transfer on death or separation should not remove negative gearing rights, but the rules are still complex and it is always best to have the position checked.
If you own a main residence bought before 12 May 2026 and are considering renting it out in future, the new rule means the property should keep its original acquisition date for negative gearing purposes, but there could still be some complex CGT implications.
Keep clear records of the original purchase date and ownership history.

If either situation applies to you and you would like confirmation of how the amended rules work in your circumstances, contact us.

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Travel Records: Why They Matter for Australian Tax Affairs

Team Juggernaut — Thu, 01 Oct 2026 02:28:00 +0000

Travel records can become increasingly important for your Australian tax affairs if you spend significant periods outside Australia.

If you spend time outside Australia for work, family or personal reasons, your travel history could become increasingly important when it comes to your Australian tax affairs.

On 24 August 2026, the ATO gazetted its latest passenger movements data-matching program. Under the program, the Department of Home Affairs is expected to provide the ATO with travel information for around 115,000 individuals each year from the 2026–27 income year through to 2028–29.

The information may include an individual’s name, date of birth, arrival and departure dates, passport details and citizenship or visa status. The ATO can then compare this information with its own records to identify potential issues with tax residency, registration, lodgement, reporting and payment obligations.

For taxpayers who regularly travel overseas, one of the most important areas to consider is their tax residency position.

Why tax residency matters

Your Australian tax residency status can have a significant impact on how you are taxed.

For example, Australian residents are generally taxed on their worldwide income, while foreign residents are generally taxed only on their Australian-sourced income. Residency can also affect the tax-free threshold, Medicare levy obligations and capital gains tax (CGT) outcomes.

This means that where you have moved to or from Australia, or spent extended periods overseas, the exact dates you entered and left Australia can be important when preparing your tax return.

The ATO will now have access to passenger movement information from an independent government source. If the dates reported by a taxpayer do not appear to align with those records, this could potentially prompt the ATO to seek further information.

Importantly, spending time overseas does not automatically make someone a foreign resident for tax purposes. Tax residency is determined by considering a range of factors, including family circumstances, the strength of connections with Australia and someone’s intentions and behaviour. However, accurate travel records can be an important part of establishing the overall position.

When could your travel history matter?

There are several situations where keeping accurate travel records could be particularly useful.

Part-year residency

If you became or ceased to be an Australian tax resident during the year, the dates you arrived in or departed Australia may form part of the evidence supporting your residency position. They can also be relevant when determining whether a part-year tax-free threshold applies.

Working overseas

If you regularly travel overseas for work, your travel history may help establish when you were working in Australia and when you were overseas. This can be particularly relevant where your tax position involves foreign employment income, work-related travel or other overseas activities.

Selling an Australian property

If you have moved overseas and later sell an Australian property, your residency history can be relevant to the CGT treatment. An individual’s tax residency status can have a significant impact on whether the main residence exemption can apply on the sale of someone’s home, so keeping a clear record of when you were living in Australia and when you were overseas can be helpful.

What should you do?

There is no need to be concerned simply because you travel overseas. However, if you spend significant periods outside Australia, it is worth making sure your records are accurate and consistent.

As a practical starting point:

Keep a record of your arrival and departure dates for each trip, including the year in which the travel occurred.
Retain useful supporting records such as flight itineraries, boarding passes and passport records where available.
Let us know about significant periods spent overseas, particularly if you have moved overseas or are considering doing so.
Before lodging your tax return, check that the dates used in any residency calculation or other relevant tax treatment are accurate.

Good record-keeping is particularly important where your residency position is not straightforward. If there is a difference between the dates you have reported and the information available to the ATO, having supporting records can make it much easier to explain the position.

A small detail that could make a big difference

For most taxpayers, the ATO’s passenger movements data-matching program is unlikely to have any direct impact. However, for people who regularly travel overseas, have moved countries or have a residency position that is finely balanced, accurate travel records could become increasingly valuable.

Rather than waiting for the ATO to raise a query, it is worth discussing your circumstances with us if you have spent substantial time overseas during the year or plan to in the near future.

A few minutes spent checking your travel dates and residency position could help avoid unnecessary questions later and provide greater confidence that your tax return accurately reflects your circumstances.

If you have any questions in relation to any of the above, please contact us to discuss further.

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SMSF Property: How to Prepare for a Smooth Audit

Team Juggernaut — Mon, 14 Sep 2026 06:03:23 +0000

SMSF property can be one of the most significant assets in a fund, making accurate valuations and supporting evidence important for a smooth annual audit.

For many SMSF trustees, property is one of the most significant assets held by their SMSF. Unlike personally owned assets, there is a legal requirement that all SMSF assets are valued each 30 June. This can be a simple process for assets that have a ready market, like listed shares; however, the process for other assets like property can be more onerous.

Trustees are responsible for determining the market value of fund assets. After your annual financial statements are prepared, your fund auditor will need to see objective and supportable evidence that backs up how you have arrived at the market value.

Trustees have the option to use a qualified independent valuer for this and should consider this where an asset represents a significant part of the fund’s value or might be difficult to value.

Where trustees choose not to use an independent valuer, they will need to be able to support asset valuations with evidence from multiple sources. Typically, for property, this may include:

Recent comparable sales – Generally at least 3, and the properties should be genuinely comparable in terms of size and location.
A real estate agent appraisal that also includes comparable sales.
Net income yields for commercial property (generally not sufficient evidence on its own).

The ATO includes some helpful guidance on this in their Guide to valuing SMSF assets.

Where an SMSF holds property that meets the business real property (BRP) definition, it is possible that this property can be leased to a business that is operated by a member or a related party of the SMSF. However, the fact that an arrangement like this is permitted does not mean the fund trustees can charge a non-market rate of rent.

When a rental arrangement is entered into with a related party of the super fund, that arrangement should be on arm’s length (commercial) terms and this should be supported by a rental appraisal. An easy way to think about this is – do all the lease terms reflect an arrangement that would be agreed to if the tenant was an unrelated third party?

To evidence that a related party arrangement is on arm’s length (commercial) terms an auditor should be provided with;

A properly documented lease;
A rent appraisal when the lease was first entered into;
Evidence that the arrangement is operating based on the terms of the lease; and
Evidence that where a prior lease term has expired the terms have been reset to market value – backed up by a new rent appraisal.

Although your financial year 2026 SMSF audit might not be taking place for some months, the process can be much smoother where SMSF trustees are proactive and start to compile this evidence in advance, rather than waiting for the auditor’s request.

If you have any questions in relation to any of the above, please contact us to discuss further.

The post SMSF Property: How to Prepare for a Smooth Audit appeared first on Juggernaut Advisory.

Penalty Units Increase from 1 July 2026: What to Know

Team Juggernaut — Thu, 10 Sep 2026 00:49:00 +0000

Penalty units increased from $330 to $364 from 1 July 2026, increasing the cost of a range of ATO penalties for compliance failures.

From 1 July 2026, the value of a Commonwealth penalty unit increased from $330 to $364. While this may sound like a minor administrative change, it has a direct impact on many ATO penalties, increasing the cost of a range of compliance failures.

A penalty unit is simply the method used under Commonwealth law to calculate many fines and administrative penalties. Rather than specifying a fixed dollar amount, the legislation often refers to a certain number of penalty units. As the value of a penalty unit increases, so too do the penalties that rely on it.

The new value applies to breaches that occur on or after 1 July 2026. Earlier breaches continue to be assessed using the previous rate.

Where the increase is likely to be felt?

Many of the ATO’s administrative penalties are based on penalty units, meaning the increase flows directly through to the amount payable.

Failure to lodge on time

One of the most common penalties applies where tax returns, activity statements or other required documents are lodged late.

The base penalty is generally one penalty unit for every 28 days (or part of 28 days) that a document remains outstanding, up to a maximum of five penalty units.

For a small entity, this means the maximum base penalty has increased from $1,650 to $1,820. Higher penalties may apply to medium and large entities, while significant global entities are subject to much larger penalty amounts.

False or misleading statements

Providing incorrect information to the ATO can also result in penalties.

Where there is no tax shortfall, the law provides for base penalties of 20, 40 or 60 penalty units, depending on the circumstances and the taxpayer’s level of care.

At the new penalty unit value, these base penalties have increased to $7,280, $14,560 and $21,840 respectively, before taking into account any reductions or increases that may apply.

Self-managed super funds

Trustees of self-managed superannuation funds (SMSFs) should also be aware of the higher penalty amounts.

A range of SMSF administrative penalties are calculated using penalty units. For example, some breaches that previously attracted a penalty of $19,800 (60 penalty units) now carry a penalty of $21,840.

Importantly, these penalties are generally imposed on each individual trustee rather than the fund itself. This means the total cost can increase significantly where a fund has multiple individual trustees, and the penalties cannot usually be paid from the assets of the superannuation fund.

Other obligations, such as certain record-keeping requirements, tax invoice obligations and some superannuation guarantee penalties, may also be affected by the higher penalty unit value.

Why this matters?

For most taxpayers, these penalties are entirely avoidable.

Late lodgements, poor record-keeping and incorrect information remain some of the most common reasons businesses and individuals incur ATO penalties. While the increase in penalty units may not seem substantial on its own, the cost can add up quickly where there are multiple outstanding obligations or repeated compliance issues.

It is also worth remembering that ATO penalties are generally not tax deductible, meaning they must be paid from after-tax income.

The good news is that the ATO will often consider remitting penalties (in part or full) where there are genuine mitigating circumstances, reasonable care has been taken, or a voluntary disclosure is made before the issue is identified by the ATO. Addressing problems early typically results in a better outcome than waiting until formal compliance action begins.

Practical steps to reduce your risk.

There are several simple steps that can help minimise the risk of penalties:

Lodge on time. Providing information to us well before due dates gives enough time to prepare accurate returns and meet lodgement deadlines.
Keep good records. Accurate and up-to-date records make it easier to prepare returns correctly and support your tax positions if questions arise.
Review your compliance regularly. If you operate a business or manage an SMSF, periodic reviews can identify issues before they become costly.
Seek advice early. If you think you’ve made a mistake or have fallen behind with your tax obligations, speaking with us as soon as possible will generally provide more options than waiting for the ATO to contact you.

A timely reminder.

The increase in penalty units is a timely reminder that the cost of tax non-compliance continues to rise. While the higher penalties are intended to encourage timely and accurate compliance, they also reinforce the value of good record keeping and proactive tax management.

If you have any concerns about outstanding lodgements, record-keeping obligations or any other tax compliance matter, please contact us. We can help you address issues early and minimise the risk of unnecessary penalties.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Travel Allowance Rates 2026–27: What Employees Need to Know

Team Juggernaut — Tue, 08 Sep 2026 23:36:00 +0000

Travel allowance rates for the 2026–27 income year have been updated by the ATO, with new reasonable amounts applying to travel and overtime meal expenses.

The ATO has released its updated reasonable travel and overtime meal allowance rates for the 2026–27 income year in Taxation Determination TD 2026/4.

The overtime meal allowance has increased to $40.00, while the reasonable amounts for domestic and overseas travel have also been updated based on salary levels and travel destinations.

Although these figures are widely publicised each year, they are often misunderstood. A common misconception is that employees can automatically claim a tax deduction up to the ATO’s published rates. In reality, the rules are much narrower, and applying them incorrectly could lead to deductions being denied as well as interest and penalties.

A travel allowance is the starting point.

The ATO’s reasonable amounts only become relevant if an employee receives a genuine travel or overtime meal allowance from their employer.

Generally, an allowance should:

Be paid specifically to cover work-related travel or overtime meal expenses;
Relate to particular work trips or overtime worked, rather than being a general additional payment;
Be shown separately from normal salary or wages; and
Be intended to help cover expenses the employee is expected to incur.

If an amount has simply been built into an employee’s normal salary package or is not identified as a separate allowance, the ATO’s reasonable rates generally do not apply. Instead, the normal substantiation rules will usually apply to any deduction claimed.

The reasonable rates are not an automatic deduction.

One of the most common misunderstandings is that receiving a travel allowance allows an employee to automatically claim the ATO’s published rate as a tax deduction.

This is not how the rules operate.

Employees can generally only claim the amount they actually spend on deductible work-related travel or overtime meal expenses. The ATO’s reasonable amounts simply mean that, in certain circumstances, employees may not need to keep a receipt for every specific expense.

Importantly, the expenses must still have been incurred, and they must relate to work-related activities.

Good records are still essential.

Even where a genuine travel allowance has been paid, employees should still keep sufficient records to demonstrate that they incurred the expenses and that their claim is reasonable.

Useful records may include:

A diary recording work trips and overnight travel;
Details of meals and incidental expenses incurred while travelling;
Bank or credit card statements showing the expenses were personally paid;
A representative sample of receipts; and
Where travel involves six or more consecutive nights away from home, a travel diary recording the dates, locations and purpose of the travel.

While receipts may not always be required, relying solely on the ATO’s published rates without any supporting evidence could expose you to unnecessary scrutiny if your return is reviewed.

Practical tips for employees and employers.

If you receive a travel or overtime meal allowance, it is worth checking that the arrangement satisfies the ATO’s requirements before claiming a deduction.

Some practical steps include:

Review your payslip. Check that the allowance is separately identified rather than being included in ordinary salary or wages.
Keep records throughout the year. Maintaining a simple travel diary and retaining some supporting documents is much easier than trying to recreate the information months later.
Only claim what you actually spend. The ATO’s reasonable amounts are not a target or standard deduction. They simply provide a benchmark for when the normal receipt requirements may be relaxed.
Take extra care on longer trips. If you are away from home for six or more consecutive nights, additional travel diary requirements will generally apply.

A little preparation can avoid problems later.

The updated reasonable amounts provide a useful guide for employers and employees during the 2026–27 income year, but they should not be viewed as an automatic entitlement to a tax deduction.

Understanding how the rules operate, keeping appropriate records and claiming only genuine work-related expenses can significantly reduce the risk of problems if the ATO reviews your tax return.

If you or your employees receive travel or overtime meal allowances, now is a good opportunity to review your current arrangements. We can help you confirm whether the allowances meet the ATO’s requirements and what records should be kept to support any future claims.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Discretionary Trusts: Proposed 30% Minimum Tax Explained

Team Juggernaut — Tue, 08 Sep 2026 01:24:00 +0000

Discretionary trusts have long been a popular structure for Australian families and businesses, but proposed tax changes could significantly affect their future use.

Discretionary trusts, often referred to as family trusts, have been a popular structure for Australian families and businesses for many decades. They are commonly used to operate family businesses, hold investments and assist with succession planning. Their flexibility, together with asset protection and estate planning benefits, has made them an attractive option for many groups.

In the 2026–27 Federal Budget, the Government announced a significant proposed change. From 1 July 2028, trustees of discretionary trusts would generally be required to pay a minimum tax of 30% on the trust’s taxable income.

According to the Government, the proposal is intended to better align the tax paid on trust income with that paid by salary and wage earners, while reducing opportunities to split income between family members. However, the announcement has generated considerable debate. Professional bodies, business groups and tax advisers have expressed concerns that the changes could increase complexity and compliance costs for many genuine family businesses and investment structures.

How the proposal is expected to work?

Under the proposal, the trustee would generally pay the minimum 30% tax on the trust’s taxable income.

Where trust income is distributed to individual beneficiaries or certain other non-corporate beneficiaries, those beneficiaries would generally receive a non-refundable tax offset recognising the tax already paid by the trustee. This is intended to reduce the risk of the same income being taxed twice, but while maintaining the impact of the 30% minimum tax rate.

Importantly, the minimum tax would not apply to every trust. The Government has indicated that a number of trusts would be excluded, including fixed trusts, widely held trusts, complying superannuation funds, charitable trusts, deceased estates, special disability trusts and genuine testamentary trusts. Primary production income and certain income relating to vulnerable minors would also be excluded.

The Government has also stated that more than 90% of small businesses are not expected to be affected. While that may be reassuring for some taxpayers, there are still some important issues that could affect family groups using discretionary trusts.

What could this mean in practice?

One area likely to receive close attention is the use of companies as beneficiaries of family trusts.

Many family groups have historically distributed some trust income to a company. This can provide flexibility in managing cash flow, retaining profits within the business and funding future growth. Under the proposed rules, however, the corporate beneficiary would not receive a tax offset for the tax already paid by the trustee. In many cases, this will mean that income distributed from a discretionary trust to a company would be subject to double taxation.

Another practical impact of the proposed change is that some family groups may find it more difficult to fully utilise existing tax losses.

While the impact will depend on each group’s circumstances, the proposed minimum tax is likely to reduce some of the flexibility that currently exists when managing taxable income across a family structure within many groups.

The Government has also proposed a temporary three-year rollover period, commencing from 1 July 2027, to help restructure into alternative business structures, such as companies or fixed trusts, without triggering immediate income tax or capital gains tax consequences.

While this may assist some groups, restructuring is rarely straightforward. Depending on the circumstances, it might be necessary to consider things like stamp duty, loan approvals, financing arrangements, contract changes, licensing requirements and professional advice. Even relatively simple restructures can involve significant time and cost, so careful planning will be important.

The rules are not yet final.

At this stage, the proposal remains subject to consultation. Treasury released a consultation paper in July 2026 seeking feedback on a range of design issues, including how the new rules would operate in different situations. Final legislation has not yet been introduced, meaning aspects of the proposal could still change before the rules become law.

For this reason, most groups utilising discretionary trust structures should avoid making major structural decisions based solely on the announcement. Instead, it is sensible to monitor developments while considering whether existing structures are likely to remain appropriate if the proposal proceeds.

What should you do now?

For many families, discretionary trusts are about much more than tax. They can continue to provide valuable asset protection, succession planning and business flexibility. The proposed changes do not remove those benefits, nor do they prevent discretionary trusts from continuing to be used.

However, the proposal does have the potential to change the tax outcomes for some family groups, particularly those with more complex structures or those that regularly distribute income to companies.

With the proposed start date still some time away, there is an opportunity to pause and carefully understand how the changes may affect your circumstances and consider whether any planning or restructuring might be appropriate. As the legislation develops, we can help you assess the impact on your business or investment structure and determine whether any action is warranted.

If you have any questions in relation to any of the above, please contact us to discuss further.

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SMSF Borrowing Rules: What the New Changes Mean for Trustees

Team Juggernaut — Thu, 13 Aug 2026 03:20:55 +0000

SMSF borrowing rules have changed, affecting how trustees can use limited recourse borrowing arrangements to purchase property.

To ensure passage of the negative gearing and CGT discount changes that were announced in the May 2026 Federal Budget, the Government agreed to make amendments to the SMSF borrowing rules.

SMSFs are able to borrow in restricted circumstances, which include borrowing under a limited recourse borrowing arrangement (LRBA) to purchase a single acquirable asset. While there have previously been no specific legislative restrictions on the type of asset an SMSF can borrow to purchase, most commonly we see LRBAs being used to purchase property. Up until this point, this could have been any type of real property.

These amendments will mean that when SMSF trustees wish to borrow to purchase a property, it must meet the business real property (BRP) definition. This BRP definition relates to usage of the property rather than zoning or what the property was originally built for.

This change became law on 26 June 2026, but the Bill includes a 45-day transitional period which will finish on 10 August 2026. This transitional period may allow for arrangements that are currently being implemented on non-BRP assets to be allowable under the new rules where settlement occurs after 10 August 2026, provided the arrangement to purchase the property was entered into on or before 10 August 2026. We recommend that SMSF trustees who are currently implementing LRBA arrangements on non-BRP assets seek specialist SMSF legal advice to ensure their arrangements meet these transitional rules.

While this change has been referred to in the media as a ban on super funds borrowing to purchase residential property, the use of the BRP definition makes the change slightly more complex than this. As this definition relates to usage of the property, it is possible that some residentially designed properties could meet the BRP definition (for example, a medical practice that operates from a residentially designed terrace dwelling).

The BRP definition also requires that the property is wholly and exclusively used for business purposes. This could mean that some properties that may initially appear to be commercial in nature may not meet the BRP definition (for example, a mixed-use residential and retail property on a single title).

We recommend that SMSF trustees entering into new LRBAs seek advice from specialist legal and financial advisers to ensure the new requirements are met.

Existing arrangements

The updated rules allow for existing LRBAs over non-BRP assets to continue. They also allow for existing arrangements to be refinanced, subject to lender availability and approval.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Car Thresholds 2026–27: What Businesses Need to Know

Team Juggernaut — Wed, 05 Aug 2026 23:05:00 +0000

Understanding car thresholds is important if you’re purchasing or leasing a vehicle for your business in the new financial year.

If you’re thinking about purchasing or leasing a vehicle for your business in the new financial year, it’s worth understanding the updated car thresholds that apply from 1 July 2026. While these limits may seem technical, they can have a practical impact on the amount you can claim for tax depreciation deductions, the GST credits that are available, and whether luxury car tax (LCT) could apply.

Knowing how these rules work before signing a contract can help you make a more informed decision and potentially improve your overall tax and cash flow position.

The car limit – understanding the depreciation cap

For vehicles first used or leased in the 2026–27 income year, the car limit is $69,883.

This limit generally represents the maximum value that can be used when calculating tax depreciation deductions for a passenger vehicle, regardless of how much was actually paid for the car.

From a commercial perspective, this is an important consideration if you’re looking at a higher-value vehicle. While purchasing a more expensive car may still make sense for operational or business reasons, the portion of the purchase price above the car limit will generally not attract depreciation deductions.

If the vehicle is used for both business and private purposes – which is common for many business owners – you would typically only be able to claim deductions for the business-use portion. Maintaining appropriate records, such as a valid logbook and odometer readings, remains an important part of supporting those claims should the ATO undertake a review or audit.

Rather than focusing solely on the purchase price, it is often worthwhile considering the overall after-tax cost of the vehicle. In many cases, a vehicle priced around the car limit may provide similar practical benefits while maximising the available tax deductions.

It’s also worth confirming which depreciation rules apply to your circumstances, including whether any simplified depreciation concessions are available so that deductions can be claimed at a faster rate.

GST credits – also subject to a cap

Businesses that are registered for GST may also be entitled to claim GST credits when purchasing a business vehicle. However, where the purchase price exceeds the car limit, the GST credit is also capped.

For the 2026–27 financial year, the maximum GST credit available is $6,353 (being one-eleventh of the $69,883 car limit) for passenger vehicles.

Even if the vehicle costs considerably more, the GST credit will generally not increase beyond this amount. However, when the vehicle is sold, you will normally need to pay GST on the full sale price.

For many businesses, GST credits can provide an important short-term cash flow benefit, so it is important to ensure they are claimed correctly and within the relevant time limits through your Business Activity Statement (BAS).

Luxury Car Tax thresholds increase

The Luxury Car Tax (LCT) thresholds have also increased from 1 July 2026 and are now:

$91,661 for fuel-efficient vehicles.
$80,809 for all other vehicles.

Where applicable, LCT is generally imposed at 33% of the value above the relevant threshold, increasing the overall purchase cost of eligible vehicles.

If you’re considering a premium vehicle, these thresholds may become an important part of the purchasing decision. In particular, many fuel-efficient vehicles, including a range of hybrid and electric models, benefit from the higher threshold. Depending on the vehicle selected, this could potentially reduce the amount of LCT payable while also delivering lower running costs over the life of the vehicle.

Planning ahead can pay off

These updated thresholds apply to vehicles first used or leased from 1 July 2026, making now an ideal time to review any planned vehicle purchases.

Before making a decision, it may be worthwhile considering:

The total after-tax cost of ownership, including depreciation deductions, GST credits and any LCT;
Whether purchasing or leasing is likely to be more suitable for your circumstances;
The expected business use of the vehicle and the records you’ll need to maintain; and
How the purchase fits within your broader cash flow and business plans.

Whether you’re replacing a work vehicle, expanding your fleet or purchasing a new car for client-facing activities, taking these factors into account can help ensure the vehicle meets both your operational requirements and your tax objectives.

Key takeaways

A business vehicle is often a significant investment, and while tax considerations shouldn’t drive the decision, they can influence the overall cost of ownership.

Before committing to a purchase, it’s worth speaking with your accountant to model the likely tax outcomes based on your individual circumstances. A little planning upfront may help you maximise available tax concessions, avoid unexpected costs and ensure the purchase aligns with your broader business strategy.

For more information, refer to the ATO’s Small Business Newsroom: Car thresholds from 1 July | Australian Taxation Office, or contact our team to discuss how these changes may apply to your business.

If you have any questions in relation to any of the above, please contact us to discuss further.

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