Juggernaut Advisory

Business Sale Valuations Lessons from the Kilgour Case for CGT Planning

Team Juggernaut — Wed, 15 Apr 2026 05:58:53 +0000

Business sale valuations can significantly affect CGT outcomes, making the Kilgour case an important reminder for owners planning a sale, restructure or exit strategy.

When selling a business—or even a slice of one—how you value the assets involved can have a major impact on the tax bill. A recent Full Federal Court decision, Kilgour v Commissioner of Taxation [2025] FCAFC 183, offers timely guidance on how “market value” is really determined for capital gains tax (CGT) purposes.

When preparing for transactions, restructures or potential exit events, the case is a useful reminder: valuations must reflect real commercial conditions, not just theoretical models.

What Happened?

In 2016, three family trusts sold 100% of the shares in Punters Paradise Pty Ltd, an online wagering business, to News Corp for approximately $31 million. The ownership split was:

Pettett Trust – 60%
Kilgour Family Trust – 20%
Reuhl Family Trust – 20%

The sale was negotiated at arm’s length, involved extensive due diligence, and included a working-capital adjustment after completion.

The minority beneficiaries (20% holders) sought to use the small business CGT concessions, which in this case required the seller’s net assets to be below $6 million. To fall below the threshold, they argued their 20% minority interests should be heavily discounted in value—because a small holding is usually worth less on a standalone basis.

The ATO disagreed, saying each 20% parcel formed part of a coordinated 100% sale and should simply be valued as 20% of the final $31 million deal price.

The Court agreed with the ATO.

How the Court Approached Market Value

The Court applied the long-standing “willing buyer/willing seller” principles from Spencer v Commonwealth—but with a modern, commercial twist. Two practical messages emerge:

1. Real-world expectations matter more than rigid valuation dates

Although the tax rules in this area require looking at value “just before” signing the sale contract, the Court said you cannot ignore things that were reasonably predictable at that point. Here, the sale was essentially locked in through negotiations, so the final agreed price was the best evidence of market value.

Practical takeaway: If a purchaser is clearly willing to pay a premium—for control, synergies, strategic value or expansion opportunities—those factors will likely shape the valuation for tax purposes.

2. Actual deal terms beat theoretical discounts

The taxpayers tried to argue for a typical “minority discount”. However, the Court said the real commercial context matters more:

All shareholders intended to sell together.
The buyer wanted all the shares, not bits and pieces.
A coordinated, 100% sale typically lifts the value of each parcel.

Because of that, the hypothetical buyer would not insist on a discount. The minority interests effectively rode on the value of the full-stake sale.

Practical takeaway: When shareholders act collectively, the tax valuation of each interest can increase—sometimes significantly.

What This Means for Business Owners

Don’t undervalue your stake – If the buyer is pursuing synergies or control, your interest might be worth more than a textbook minority valuation suggests. Make sure your advisers consider the wider commercial picture.
Evidence is everything – Keep thorough records such as negotiations, emails, valuations, buyer motivations. These can be powerful in supporting your tax position and accessing concessions.
Plan CGT concession eligibility early – If you’re relying on the small business concessions, test different deal scenarios before signing any contracts or other paperwork, including a heads of agreement. Sometimes restructuring ownership or staging a sale can make a material difference, but integrity and anti-avoidance rules in the tax system still need to be considered carefully.
Align shareholder expectations – In family groups and private companies, minority owners often assume their shares will be valued as a standalone piece. Kilgour shows that courts will often look at the transaction as a whole—not each slice in isolation.

The Bottom Line

Kilgour reinforces that valuations for tax purposes work best when they reflect the real commercial world, not theoretical models. Before you sell, restructure or negotiate with a potential buyer, involve your accountant early. A well-supported valuation can mean the difference between accessing valuable CGT concessions—or missing out.

If you have any questions, please feel free to contact our office.

The post Business Sale Valuations Lessons from the Kilgour Case for CGT Planning appeared first on Juggernaut Advisory.

FBT Work Vehicles ATO Crackdown on Utes Cars and Employer Vehicle Use

Team Juggernaut — Thu, 09 Apr 2026 02:19:00 +0000

FBT work vehicles are under increasing ATO scrutiny, making it essential for employers to review private use, records and reporting before the next FBT deadline.

The ATO is turning up the heat on employers who provide work vehicles for private use. Sophisticated data-matching means assumptions and shortcuts can quickly lead to audits, penalties, interest charges—and even reputational damage. You can see the latest ATO FBT audit warning here: Misreporting FBT on personal use of work vehicles | Australian Taxation Office

If you provide vehicles to your team, whether to support fieldwork, boost morale, or offer a valuable perk, now is the time to ensure your FBT reporting is watertight. Here’s what the ATO is focusing on—and how to protect your business.

Don’t Assume Dual-Cab Utes Are Automatically Exempt

Dual-cab utes are popular in trades and construction, but despite popular opinion, they’re not automatically FBT-free.

Whether an FBT exemption applies can depend on the vehicle’s design and also how it is used across the FBT year.

Even if a ute is designed to carry a load of at least 1 tonne (ie, it is not classified as a car for FBT purposes) or it isn’t designed mainly to carry passengers (there is a specific formula used for this purpose) FBT could still be triggered if there is some private use of the ute.

The ATO has identified many cases where employers wrongly claimed full FBT exemptions, leading to back taxes plus interest.

The best way to handle ATO enquiries around the FBT exemption for commercial vehicles is to ensure that appropriate evidence is already in place to support the application of that exemption. While the FBT rules don’t specifically require formal logbooks when looking at this exemption, failing to keep records that are similar to a logbook can make it difficult to navigate ATO review or audit activities.

Accurately Apportion Private vs Business Use

If a full FBT exemption doesn’t apply then FBT is typically calculated on private use of work vehicles. You need to determine what portion of running costs—fuel, maintenance, depreciation—relates to personal trips. Ignoring this step can seem harmless but can quickly escalate during an audit.

Thorough record-keeping and proper apportioning can sometimes reduce your FBT liability even if the vehicle is used mainly for business purposes.

Remember that if a FBT liability is triggered it is the employer’s problem.

Lodging FBT Returns

Even if you think the FBT liability for the year might be small or immaterial, you might find that there is still an obligation to lodge an FBT return. The ATO’s analytics flag non-lodgers automatically. Penalties can reach up to 200% of the tax owed, plus interest.

Tip: Mark your calendar—FBT returns are due May 21 each year. Timely filing keeps your business compliant and avoids cash flow shocks.

Keep Reliable Logbooks and Records

A valid logbook tracks odometer readings, trip purposes, and business-use percentages over a 12-week period (renewable every five years). While not every scenario involving a motor vehicle specifically requires a valid logbook, failing to keep logbooks can sometimes lead to significant FBT liabilities that could otherwise have been avoided.

Efficiency tip: Digital logbook apps simplify tracking, save time, and reduce errors. Good records can also support deductions.

Why it Matters Commercially

Non-compliance isn’t just a numbers game. ATO audits divert time and energy from running your business, and ATO attention can affect your reputation with clients, partners, or lenders. Conversely, getting FBT right ensures you pay only what’s required, protects cash flow, and may even reveal tax efficiencies.

Next steps: Review your vehicle policies, update records, and ask us if you need help. We help businesses manage FBT with confidence—making compliance straightforward and stress-free.

Remember: assumptions can be costly, but a proactive approach protects your business, your people, and your peace of mind.

If you have any questions, please feel free to contact our office.

The post FBT Work Vehicles ATO Crackdown on Utes Cars and Employer Vehicle Use appeared first on Juggernaut Advisory.

Family Business Fringe Benefits Tax Wake Up Call for Owners and Directors

Team Juggernaut — Wed, 08 Apr 2026 00:00:00 +0000

Family business fringe benefits tax risks are under growing ATO scrutiny, making it essential to review perks provided to directors and family members before lodgement season.

As Fringe Benefits Tax (FBT) lodgement season approaches, family businesses should carefully review the perks they provide to working directors and family members. A high-profile case involving luxury vehicles provided to three brothers who run a large business empire through a discretionary trust highlights the complexities — and potential risks — of informal arrangements. While the case initially appeared to expand FBT exposure, the latest decision handed down by the Full Federal Court offers reassurance that not all benefits provided to working owners will automatically trigger FBT.

What may seem like harmless “owner entitlements” or beneficiary perks can still attract scrutiny from the Australian Taxation Office (ATO). However, the courts have emphasised the importance of substance, documentation, and the capacity in which benefits are provided.

The Background

Three brothers operate a substantial business involving petrol stations, convenience stores, fast food, tobacco outlets, and gift shops. They serve as shareholders, directors, and key decision-makers (with powers as appointors under the trust deed), working long hours in executive-style roles without drawing formal cash salaries or wages. Profits and benefits flow through the family discretionary trust (SFT Trust), of which their corporate trustee (SEPL Pty Ltd) is the trustee. The brothers and family members are beneficiaries.

The business provided them with exclusive access to over 40 luxury and high-performance vehicles (including Bentleys and Ferraris) for both business and personal use. Costs associated with personal use were debited to the matriarch’s beneficiary account and later cleared by trust distributions — a mechanism consistent with beneficiary entitlements rather than employment remuneration.

The ATO assessed FBT on the private use component of these car benefits, arguing they were fringe benefits provided to the brothers as “employees” in respect of their employment.

What the Court Decided

The Administrative Appeals Tribunal (AAT) initially ruled in favour of the taxpayer (Re BQKD and Commissioner of Taxation [2024] AATA 1796). It found that the brothers were not “employees” for FBT purposes and that, even on a hypothetical basis, the vehicle benefits were not provided “in respect of” any employment. The benefits were instead linked to their capacities as beneficiaries, proprietors, and controlling family members.

The Commissioner appealed to a single judge of the Federal Court, who in June 2025 (Commissioner of Taxation v SEPL Pty Ltd as trustee of the SFT Trust [2025] FCA 581) allowed the appeal. Justice O’Sullivan held that the brothers were employees under the broad FBT definitions (including via the hypothetical deeming rule in s 137 of the Fringe Benefits Tax Assessment Act 1986 (Cth) — FBTAA) and that the benefits were provided in respect of their employment.

The taxpayer then appealed to the Full Federal Court. On 27 March 2026, in SEPL Pty Ltd as trustee of the SFT Trust v Commissioner of Taxation [2026] FCAFC 36 (Perry, O’Callaghan and Thawley JJ), the Full Court unanimously allowed the appeal. The Full Federal Court basically restored the AAT’s decision.

Key findings:

Employee status: It was open to the AAT to conclude the brothers were not “employees” for FBT purposes. The definitions of “employee” and “salary or wages” ultimately draw on common law concepts of employment. The AAT properly considered factors such as the absence of employment contracts, no wages or leave entitlements, the presence of employed managers for operational roles, and the brothers’ control being referable to their proprietorial and governance roles rather than traditional employment.
“In respect of” employment: Even assuming (hypothetically) that the brothers were employees, it was open to the AAT to find there was no sufficient material connection between the benefits and any employment relationship. Here, access to the vehicles was not a substitute for salary or wages. The AAT correctly weighed competing explanations and found the benefits arose primarily from family/trust relationships, not employment.

Why This Matters for Your Business

The case underscores the ATO’s ongoing focus on dual-capacity individuals (e.g., directors who are also beneficiaries and active workers in trust structures). However, the Full Court’s reasoning provides important boundaries:

Informal perks for working family members in discretionary trusts are not automatically subject to FBT.
Substance and documentation matter: How benefits are provided, funded, and recorded (e.g., via trust distributions vs. remuneration) can help in determining the outcome.
Common law employment concepts remain relevant in interpreting FBT definitions.
Blending roles does not inevitably trigger FBT if the dominant characterisation is beneficiary-based.

Family businesses should still exercise caution. The ATO may continue to scrutinise similar arrangements, particularly where benefits appear to represent a substitute for remuneration or lack clear documentation. Superannuation contributions or executive titles can sometimes support employee characterisation, though they were not decisive here.

Practical Steps to Protect Your Business

Don’t wait for an audit—review your arrangements now:

Document clearly: If a benefit is a trust distribution to a beneficiary, record it via trustee resolutions. If it’s tied to work duties, treat it as a fringe benefit and calculate FBT accordingly. Or confirm why they fall outside the regime.
Consider FBT properly: Apply statutory formulas or operating cost methods for cars. Employee contributions (e.g., reimbursing personal use) can reduce or eliminate liability.
Consider exemptions/concessions: Minor benefits under $300, or salary packaging for EVs, might help.
Audit overlaps: We also need to check for Division 7A loan issues or deemed dividends if benefits flow through private companies.
Plan proactively: With ATO focus intensifying (as highlighted in recent compliance updates), model scenarios to minimise tax without losing commercial perks.

Remember that if the ATO discovers some unreported FBT liabilities then the business can also be exposed to penalties and interest.

The SEPL case ultimately favours the taxpayer and reinforces that FBT does not capture every benefit provided to working owners in family trust structures. However, every arrangement turns on its specific facts and evidence.

If your business provides vehicles, phones, travel, or other perks to family members actively involved in operations — especially without formal salaries — now is a good time to review. Our team can help analyse your structures, run FBT calculations or risk assessments, and implement practical fixes to protect profits while maintaining flexibility.

The law in this area is fact-sensitive and continues to evolve. Professional advice tailored to your circumstances is essential.

If you have any questions, please feel free to contact our office.

The post Family Business Fringe Benefits Tax Wake Up Call for Owners and Directors appeared first on Juggernaut Advisory.

Division 296 Tax: What the New Super Tax Means for Large Balances

Team Juggernaut — Tue, 07 Apr 2026 05:51:33 +0000

Division 296 tax is now law and will apply from 1 July 2026 to individuals with large superannuation balances above key thresholds.

The Better Targeted Superannuation Concessions measure (known as the Division 296 tax) is now law and takes effect from 1 July 2026. For those with large super balances, it’s important to understand what the new tax does, why it’s been introduced, and the practical steps you and your financial adviser should consider.

The Purpose of the Tax

Division 296 is designed to make superannuation tax concessions fairer and more sustainable. Rather than changing the way super is taxed for everyone, the law targets a small group of people who hold large super balances, ensuring they pay more tax on the portion of investment earnings that relate to those large balances.

Who it Applies to — Thresholds and Rates

This new measure, starting 1 July 2026 (first year is 2026-27), applies to an individual with total superannuation balances (TSBs) in excess of the following thresholds:

Large balance threshold: $3.0 million
Very large threshold: $10.0 million.

Both thresholds will be indexed in future years.

This will mean that the overall tax imposed on superannuation fund earnings will be as follows:

Division 296 TSB	Div 296 tax rate on earnings relating to this band	Total effective tax on those earnings
Up to $3,000,000	0%	15% (standard fund tax)
$3,000,001 to $10,000,000	15%	30% (15% + 15%)
Above $10,000,000	25%	40% (15% + 25%)

Certain people will be excluded from having this new tax levied upon them, notwithstanding that their TSB may exceed the threshold. Excluded persons include child recipients of death benefit pensions and individuals who have made structured settlement superannuation contributions for a personal injury compensation payment.

Further, where a person dies, they will no longer have a TSB. However, other than the first year of operation (ie, 2026-27), there can still be a Division 296 tax assessment in respect of the financial year in which they die, where they had a TSB of more than $3 million at the start of the year. Given superannuation is not an estate asset, this scenario should be considered as part of a review of an individual’s estate plan.

How the Tax Works

From an SMSF perspective, the fund will calculate its Division 296 earnings, which is based on its taxable income with adjustments for assessable contributions; net exempt income attributable to pensions; any non-arm’s length income (which is already taxed at 45%) and income relating to investments in a pooled superannuation trust. There may also be adjustments for any capital gains made from the disposal of fund assets, if the fund has made the relevant small-fund CGT election.

The calculated Division 296 superannuation earnings is then attributed to fund members using an attribution percentage calculated by an actuary. This information will be used by the ATO to assess the member’s Division 296 tax liability.

Division 296 tax is levied on the individual, not a superannuation fund. However, the tax can be paid either by the individual or they can elect for the amount to be deducted from their nominated superannuation interest.

Next Steps

If your total super balance is near—or already above—the thresholds, it is important that you contact your financial adviser to arrange tailored modelling and to discuss whether the small-fund CGT election is suitable. Early planning will help you manage cashflow, reporting and any actuarial requirements efficiently.

This will also be an opportunity to review the suitability and benefits of holding investment capital in a superannuation structure versus alternatives for amounts in excess of the large threshold.

If you have any questions, please feel free to contact our office.

The post Division 296 Tax: What the New Super Tax Means for Large Balances appeared first on Juggernaut Advisory.

Payday Super Cashflow: How to Avoid a Cashflow Shock from New Super Rules

Team Juggernaut — Wed, 01 Apr 2026 03:10:24 +0000

Payday super cashflow changes mean businesses must adjust quickly as super payments move from quarterly to every pay cycle.

From 1 July, superannuation must be paid on or before each payday.

For many businesses, this isn’t just a compliance update, it’s a cashflow shift that can catch you off guard if you’re not prepared.

The Risk Most Businesses Aren’t Thinking About

Right now, you can hold onto super for up to three months before paying it. From 1 July, that changes. Instead of holding that cash, you’ll be paying it:

Every week
Every fortnight
Or every month (depending on your payroll)

That’s money leaving your business much sooner than you’re used to.

The “Double Hit” Scenario

If nothing changes between now and 1 July, many businesses will face:

A large final quarterly super payment, AND
Immediate transition to ongoing weekly/fortnightly payments

This creates a sudden and avoidable strain on cash flow.

The Simple Strategy to Stay Ahead

The easiest way to avoid this pressure is to start changing your habits now.

Start Breaking Down Your Super Payments. Instead of waiting until the quarterly due date, begin making smaller, regular installments.
Start Weekly Payments from 31 March.

There’s Another Change to Be Aware Of

At the same time, the ATO Small Business Super Clearing House is being phased out. If you’re currently using it, you’ll need to move to a new provider.

This adds another layer of risk:

New systems
Different processing times
Potential delays if not set up correctly

Common Issues We’re Already Seeing

As businesses start preparing, a few problems are coming up repeatedly:

Incorrect or missing employee super details
Payments bouncing
Not allowing enough time for clearing house processing
Assuming “submitted” means “paid” (it doesn’t)

What You Should Do Next

You don’t need to overhaul everything overnight but you do need to start now. This week, we recommend:

Reviewing how you currently pay super
Making a partial payment toward your current quarter
Planning to start weekly payments from 31 March
Checking whether you use the ATO clearing house

Need Help Getting Set Up?

We’re currently helping clients:

Set up automated super in their payroll systems

Plan for the cash flow impact
Transition away from the ATO clearing house

If you’d like support, get in touch with our team.

Final Thought

This change is coming whether you’re ready or not. The businesses that handle it best will be the ones that act early, test their systems, and adjust their cashflow now instead of waiting until July.

The post Payday Super Cashflow: How to Avoid a Cashflow Shock from New Super Rules appeared first on Juggernaut Advisory.

Brand Identity Strategy: How to Stand Out in a Competitive Market

Team Juggernaut — Mon, 30 Mar 2026 03:22:57 +0000

Brand identity strategy is essential for businesses looking to stand out and build lasting value in a competitive market.

Some major businesses are able to ‘capitalise’ their brands. That means the brand has been valued and included as a balance sheet asset.

Most businesses don’t go to those lengths… but leaders who build valuable brands usually have a better chance of standing out and attracting customers and partners.

Let’s look into what makes a valuable brand.

1. Appealing core values

Values underpin brand identity. They signal what drives your decision-making, what is non-negotiable, the causes you support and the connections you cherish. Leaders should define what fundamentally matters to them and express this in a few words or short phrases. Examples include creativity, innovation, boldness, excellence and fun!

Refer back to these values when presenting the business or when making significant business decisions. If your values resonate with your target audience, you’re on your way to building a valuable brand.

2. Uniqueness

Standing out is really important, provided it’s not ‘being different for the sake of being different’. Be proud of your ‘real’ self rather than telling people what you think they want to hear. Embrace any ‘peculiarities’ instead of trying to hide them. Authenticity builds valuable brands.

3. Excellence

This refers to what you are really good at and combines your passion and mastery. You’ll be highly energised when working in your area of excellence and it will always be easy to ‘make the effort’ and overcome obstacles, which are components of brand power.

4. Enjoyment

There are probably things you love learning and talking about. This provides clues on what should underpin your brand. Enthusiasm inspires and captivates others; perfect ingredients for a powerful brand.

5. A niche

A brand is not meant to be for EVERYONE. It’s meant to be for a VERY SPECIFIC SOMEONE that you understand and know you can help. Specialisation makes for powerful branding, even if that means being a big fish in a small pond. Be the ‘go-to-person’ when a very specific need arises. This differentiates your business and brand from the competition.

6. Visual depiction

Brands are communicated by what you say and HOW you present them. That’s why designers focus on colours, fonts, style-guides and so on, which convey an emotive identity. For example, bright colour may suggest ‘fun’ and ‘innovation’ while dark colour might suggest ‘exclusivity’.

7. Content strategy

Be consistent with the message. Get attention, then build trust by offering something of value. Stick to your niche and repeat concepts to drive them home. Include a call to action and let prospects know how they can benefit from an association with you.

8. Rivals (and friends)

Worthy competitors help you do better. Know what your rivals are saying and how you are different. Find like-minded counterparts who could be allies. There could be potential for collaboration, especially where they operate in complementary spaces. Join together with kindred spirits to cross-promote and widen your reach. Who we associate with is part of our brand.

9. Anticipate the future

Even if you’re comfortable with where you are now, describe your vision for the future, whether that’s impact, lifestyle, legacy or community. If your proposed journey is compelling, people will want to get on board. Show what is possible and demonstrate your progress towards that endgame.

If you have any questions, please feel free to contact our office.

The post Brand Identity Strategy: How to Stand Out in a Competitive Market appeared first on Juggernaut Advisory.

Payday Super Changes: Two Major Super Updates Employers Must Prepare for

Team Juggernaut — Thu, 12 Mar 2026 02:49:53 +0000

Two major superannuation changes are coming for Australian employers from 1 July 2026. The introduction of Payday Super and the closure of the ATO Small Business Superannuation Clearing House (SBSCH) will change how businesses manage super payments and payroll compliance.

Preparing early will help ensure your systems, processes and cash flow are ready before the new rules begin.

Super Moves to Payday from 1 July

From 1 July 2026, employers must pay Superannuation Guarantee (SG) contributions at the same time as wages, rather than quarterly.

Under the new rules:

Super must be paid within seven days of each payday
Contributions must reach employees’ super funds within that timeframe
Late payments will trigger the Superannuation Guarantee Charge (SGC)

The SGC includes the unpaid super, interest and an administration fee, with further penalties possible if it remains unpaid.

While this change increases payment frequency, it simplifies payroll by aligning super with pay runs. Government estimates also suggest the earlier payments could increase the average worker’s retirement savings by about $7,700.

ATO Clearing House Closure – What You Need to Know

At the same time, the ATO will close the Small Business Superannuation Clearing House (SBSCH) from 1 July 2026.

Employers who rely on the SBSCH will need to move to alternative solutions such as:

Payroll-integrated super payment systems
Super Stream-enabled clearing houses
Third-party super payment platforms

Most modern payroll software already supports automated super payments, but businesses using the SBSCH should begin reviewing their options now.

Why These Changes Together Increase Risk

Together, these changes increase compliance risk for employers. Businesses will be making more frequent super payments and will need to clear the balance of any super owed, which could impact cash flow.

With only seven days after payday to process contributions, any delays in payroll processing could result in penalties. Planning ahead will help avoid disruption when the new rules take effect.

Cashflow Planning Strategies

Payday Super also changes how businesses manage cash low, as super contributions will leave the business account sooner. To prepare, employers should consider:

Gradually aligning super payments with payroll now
Updating cash low forecasts to include each pay run
Automating super payments through payroll software

Many businesses find smaller, regular payments easier to manage than large quarterly contributions.

Recommended Transition Timeline

Now – April 2026

Review your payroll and super processes
Check if you currently use the SBSCH
Confirm your payroll software supports Payday Super

Before 1 June 2026

Select an alternative clearing house if needed
Update payroll procedures
Test your super payment process

Starting early will make the transition smoother and reduce compliance risks.

How We Can Help

Our team can assist with reviewing your payroll setup, assessing clearing house options, and ensuring your systems are ready for Payday Super.

If you’d like help preparing for these changes, please contact our office.

The post Payday Super Changes: Two Major Super Updates Employers Must Prepare for appeared first on Juggernaut Advisory.

SMSF Compliance Rules: Keeping Your Self Managed Super Fund Compliant

Team Juggernaut — Wed, 11 Mar 2026 02:50:18 +0000

SMSF compliance rules require trustees to carefully manage their self managed super fund to meet legal duties and avoid penalties.

Self managed superannuation funds (SMSFs) can offer significant flexibility, allowing the members to make investments and enter arrangements that may not be available through retail or industry superannuation funds. However, being an SMSF trustee does come with important responsibilities to ensure that all dealings comply with superannuation law.

Two critical areas to keep front of mind are:

The sole purpose test, and
The arm’s length requirements in both superannuation and taxation law.

The Sole Purpose Test

The sole purpose test requires that superannuation funds should be managed for the sole purpose of providing retirement benefits to fund members. While some SMSFs may have dealings with or/investments in related entities, these are subject to strict limits and when arrangements are entered into it is important that first and foremost SMSF trustees are considering the retirement benefits of the fund members rather than the needs of any external parties.

The example below illustrates how SMSF trustees should apply the sole purpose test when looking at making a related party investment.

Example: Investing in a Related Business?

Sachin and Deepthi have an SMSF which has a total balance of $1.2m. Their son Hardik commenced a business 3 years ago using a company structure. Hardik has approached his parents to invest $50,000 into his company via their SMSF.

Although Hardik is passionate about the business it has not grown as he would like, and Sachin and Deepthi are aware that the business has had cashflow issues and profits are not at a point where the business is growing or generating a profit.

Although the proposed investment amount is within the 5% in-house asset limit would Sachin and Deepthi invest member funds in an unrelated business knowing the business was in this same situation? That is, would they be placing their son’s interests ahead of the interests of the fund members?

Based on Sachin and Deepthi’s knowledge of the business, if the SMSF was to go ahead and make this investment they as trustees may have contravened the sole purpose test.

Arm’s Length Requirements

In addition to the sole purpose test there are superannuation and taxation law requirements that SMSF trustees always deal on arm’s length commercial terms. This is again particularly important when arrangements are with fund members and/or related parties.

Where arrangements are not at arm’s length, SMSF trustees can be liable for superannuation law penalties and in some cases fund income may be taxed at a higher rate.

Some common examples and key issues are discussed below.

Example: An SMSF Owns a Commercial Property Which is Leased to a Related Party Business

The rent should be on commercial terms and this needs to be evidenced by a rental appraisal from a professional such as a real estate agent when a lease is entered into.

The lease agreement should:

Be in writing;
Clearly cover who is responsible for particular outgoings and maintenance; and
Be prepared by a legal professional.

Example: A Member of the SMSF or a Related Party Completes Work on an SMSF Property

SMSF trustees should seek professional advice before commencing any work on SMSF properties where the work may be performed by a member or a related party.

All arrangements with related entities should be commercial, including:

If a related building company is used, the SMSF must pay market rates (same as the general public) and this should be supported by documentation to satisfy the fund auditor.
If members (who are also trustees) perform work personally, strict rules apply to whether they can be paid for their services.
All materials should be purchased directly by the SMSF, not by individual members.

Please contact us to discuss these rules further if you are considering entering into any transactions or projects involving SMSF-owned property and related parties.

If you have any questions, please feel free to contact our office.

The post SMSF Compliance Rules: Keeping Your Self Managed Super Fund Compliant appeared first on Juggernaut Advisory.

Inherited Home CGT: ATO Update on What It Means for Family Wealth

Team Juggernaut — Mon, 09 Mar 2026 00:34:00 +0000

Inherited home CGT rules are under fresh scrutiny following new ATO draft guidance on how the main residence exemption applies to deceased estates.

The ATO has issued a Draft Taxation Determination TD 2026/D1 which looks at how inherited family homes are treated for CGT purposes. Some industry commentators have dubbed it a “death tax by stealth”, but it is a bit more complex than this. The draft guidance focuses on a specific aspect of the rules around applying the main residence exemption to inherited properties, potentially exposing deceased estates and beneficiaries to significant tax if not planned correctly.

Here’s what you need to know in practical terms.

Why TD 2026/D1 Matters

Under current law, deceased estates or beneficiaries can potentially sell a deceased individual’s former family home without paying CGT if certain conditions can be met. This exemption is particularly valuable for properties owned long-term, where unrealised gains could be substantial.

In order to access a full exemption you normally need to ensure that the property is sold within 2 years of the date of death (but the ATO can potentially extend this deadline) or that the property has been the main residence of certain qualifying individuals from the date of death until the property is sold.

These qualifying individuals can include the surviving spouse of the deceased individual, the beneficiary selling an interest in the property or someone who has a right to occupy the dwelling under the deceased’s will.

The draft ATO guidance focuses on this last point. That is, what does it mean for someone to have “a right to occupy the dwelling under the deceased’s will.” In summary, the ATO’s view is that:

The right to live in the home must be explicitly granted in the will to a named individual.
Broad discretionary powers given to trustees, separate agreements, or even testamentary trusts (TTs) are not sufficient in the ATO’s view.

For example:

A will giving an executor discretion to allow a family member to occupy the home does not meet this requirement.
A trustee of a TT who allows a beneficiary to live in the house is seen as separate from the will and may trigger CGT on sale.

Some legal and real estate experts warn this could force families to sell homes within two years of death to avoid CGT, especially in high-value areas.

Consider this: inheriting a $2 million home with a capital gain of $1.5 million could expose the beneficiaries to $300,000–$600,000 in tax, depending on discounts and tax brackets.

However, it is important to remember that there are still other ways for the sale of the property to qualify for a full exemption.

Practical Steps to Protect Your Estate

While we are waiting for the ATO to finalise its guidance in this area, there are steps you can take to protect your family’s assets:

Review and update your will, especially if you are planning to provide certain individuals with the right to occupy a property. Does the will currently provide this right to specifically named beneficiaries?
Plan the timing of sales – The two-year exemption window remains, but if you inherit a property and intend to hold it longer than this, weigh any potential CGT exposure against future rental income or family needs. Partial CGT exemptions might still apply, but the rules and calculations can be complex.
Seek professional advice, especially if your estate plan uses TTs. You will normally need to work closely with tax and legal advisors to structure the plan appropriately.
Be market aware – Estate planning can intersect with market timing. Quick sales may preserve CGT exemptions, but this needs to be weighed up against non-tax factors.

The key takeaway is clear: estate planning is a complex area and needs to be navigated carefully to preserve family wealth and avoid unintended tax implications.

If you have any questions, please feel free to contact our office.

The post Inherited Home CGT: ATO Update on What It Means for Family Wealth appeared first on Juggernaut Advisory.

Home Based Business CGT: New ATO Guidance on Selling Your Home

Team Juggernaut — Thu, 05 Mar 2026 00:30:00 +0000

Home based business CGT rules are becoming clearer after new ATO guidance on how running a business from home affects the main residence exemption.

Running a business from home—whether as a sole trader, freelancer, or small operator—has many perks. But when it comes to selling your home and potentially saving on tax, recent guidance from the ATO serves as a reality check.

The ATO has provided its views on how home-based businesses interact with the small business capital gains tax (CGT) concessions, providing a warning on how the ATO approaches a long-standing area of confusion.

See: Home-based business and CGT implications | Australian Taxation Office

The Key Issue: Active Asset Test

When an individual sells their main residence, they will often enjoy a full CGT exemption. However, if part of the home is used for business purposes, this can potentially impact on the scope of the exemption.

If a full exemption isn’t available under the main residence rules then we typically look to other CGT concessions, including the CGT discount for assets that have been held for more than 12 months or the small business CGT concessions.

The small business CGT concessions can potentially reduce or eliminate a capital gain made on sale of a property, but only if certain conditions are passed. One of the key conditions is that the property must pass an active asset test.

In very broad terms, to pass the active asset test you need to show that the property has been actively used in a business activity for at least 7.5 years across the ownership period or for at least half of the ownership period.

The ATO is clear: the active asset test applies to the entire property, not just the business portion. When you are applying the active asset test, an asset either passes this test or fails it. It is not really possible for an asset to partially pass the active asset test. The entire property is either an active asset or it is not.

Simply having a home office, workshop, or even being able to claim home occupancy expenses as a deduction does not necessarily make your home an active asset. Where business use is incidental to the home’s primary residential purpose, the ATO’s view is that the small business CGT concessions generally do not apply.

Rus v FCT

The view that the entire property must qualify as an active asset—and that incidental or minor business use (such as a home office or storage in a largely residential setting) is insufficient—draws support from case law, particularly the Administrative Appeals Tribunal (AAT) decision in Rus and Commissioner of Taxation [2018] AATA 1854 (Rus v FCT).

In that case, a taxpayer sought access to the small business CGT concessions on the sale of a 16-hectare largely vacant rural property, where only a small portion (less than 10% by area) was used for business purposes: a home office, shed for storing tools/equipment/vehicles, and related supplies tied to a plastering and construction business operated through a controlled company. The balance of the land remained vacant or used residentially.

The AAT upheld the ATO’s ruling that the property as a whole did not satisfy the active asset test, reasoning that the business activities were not sufficiently integral to the asset overall.

Minor or incidental use did not make the entire property an active asset, especially where the business was primarily conducted off-site. This precedent reinforces the ATO’s strict approach in home-based business scenarios: the property is assessed holistically. This means that limited business use typically fails to tip the scales toward qualifying for the concessions.

Practical Examples

Let’s take a look at how the ATO approaches some common scenarios.

Minor home-based business: Harriet runs a hairdressing salon in a spare room, using 7% of the total floor space of the property and seeing clients eight hours a week. She claims deductions for occupancy expenses and gets a 93% main residence exemption. However, because her business use is minor, she cannot access small business CGT concessions. The 50% CGT discount can still apply.

Significant business use: Sue and Rob own a two-storey building, with the ground floor operating as a takeaway store (50% of the total floor area of the property) and the top floor as their private residence. The business has been running for decades with employees. Here, the property qualifies as an active asset, potentially giving them access to the small business CGT concessions for the portion of the capital gain that isn’t covered by the main residence exemption.

What This Means for You

A partial main residence exemption doesn’t necessarily mean you have access to the small business CGT concessions. Many homeowners mistakenly assume that business deductions or a home office automatically open the door. The ATO clearly doesn’t share this view.
Seek advice before changing the way your home will be used. Starting to operate a business from home can impact on deductions, CGT calculations and access to CGT concessions. We are here to help you make fully informed decisions.
Keep thorough records. Floor plans, hours of business use, and detailed deductions can help strengthen your position and may help in any future planning or audits.
Consult your accountant. If selling your home is on the horizon, professional advice is critical to assess any potential CGT exposure and explore concessions that might be available.

The Bottom Line

The ATO’s updated guidance suggests that many home-based business owners won’t have access to the small business CGT concessions on sale of their home, but this always depends on the facts. Business owners need to plan proactively, rather than assume that tax relief will be available.

By understanding how your home’s business use is treated, you can make smarter decisions. For example, will the profits generated from a small business operated at home end up being wiped out by a higher CGT liability on sale of the property down the track?

After all, when it comes to CGT, every dollar you keep counts toward your next venture or your retirement nest egg.

If you have any questions, please feel free to contact our office.

The post Home Based Business CGT: New ATO Guidance on Selling Your Home appeared first on Juggernaut Advisory.