Practice Update – June 2023

Lowe Lippmann Chartered Accountants

Year-end tax checklists for Individuals and Businesses


We have recently prepared two Year End Checklists which help explain some common strategies that may be considered for Individual and Businesses taxpayers.



2023/24 Budget Update


On 9 May 2023, Treasurer Jim Chalmers handed down the 2023/24 Federal Budget.


Some of the measures announced by the Government (including some which were actually announced prior to the Budget), include:

  • from 1 July 2026, employers will be required to pay their employees’ superannuation at the same time as their salary and wages;
  • providing businesses with annual turnover of less than $50 million with an additional 20% deduction on spending that supports electrification and more efficient use of energy (the 'Small Business Energy Incentive'); and
  • increasing the capital works tax deduction depreciation rate for eligible new build-to-rent projects from 2.5% to 4% per year.


In addition to these, one of the most important aspects of this Budget was that the Government has provided some further depreciation relief for small businesses once temporary full expensing comes to an end on 30 June 2023.


Specifically, from 1 July 2023 until 30 June 2024, the Government will temporarily increase the instant asset write-off threshold for small businesses (with an aggregated annual turnover of less than $10 million) from $1,000 to $20,000. Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool.


Also, the provisions that prevent small businesses from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended until 30 June 2024.


Other important measures the Government announced include:

  • amending (and limiting) the non-arm’s length income (‘NALI’) provisions which apply to expenditure incurred by superannuation funds;
  • reducing the tax concessions available to individuals with a total superannuation balance exceeding $3 million; and
  • exempting lump sum payments in arrears from the Medicare levy.

In the ATO's sights this Tax Time


The ATO has announced its three key focus areas for this Tax Time:

  • rental property deductions;
  • work-related expenses; and
  • capital gains tax.


ATO Assistant Commissioner Tim Loh said the ATO is continuing to prioritise areas where they often see mistakes being made:


"Within these areas, we have identified common mistakes, and are particularly focused on addressing these and supporting taxpayers and registered tax agents to get their claims right this year."


However, the ATO also recognises that many people are "doing it tough" this year, and expects fewer people will receive a refund, or they may receive smaller refunds than they were expecting, and more may have tax debts to manage.


ATO advice regarding year-end trustee resolutions


The ATO has advised that, in the lead up to 30 June, trustee clients who wish to make beneficiaries presently entitled to trust income for the 2023 income year should ensure their trustee resolutions are effective. 


This includes where trustees may want to make beneficiaries 'specifically entitled' to franked dividends and capital gains included in that income (i.e., where trustees want to 'stream' those classes of income to certain beneficiaries).


It is important that trustee clients:

  • check their trust deed to ensure that the intended beneficiaries are within the class of persons entitled to trust income (or of trust capital, if they intend to stream a capital gain that is not income of their trust) and are not excluded from being beneficiaries;
  • comply with any requirements in the trust deed that concern how to validly 'appoint' (or distribute) trust income to beneficiaries;
  • recognise that, for tax law purposes, beneficiaries need to be made presently entitled to trust income by 30 June of the relevant year;
  • are aware that, if they fail to do what is required in a trust deed, or fail to appoint income by 30 June, this may cause outcomes to arise that differ to what they intended. This could include other beneficiaries being assessed on the relevant share of the trust's net (taxable) income (or the trustee being assessed at the top rate of tax); and
  • ensure that resolutions are unambiguous.

'Side hustles' in the ATO's sights


‘Side hustles’ have really grown over the past few years — everything from the gig economy and drop shippers, to content creators and influencers.


The ATO recognises that it can be hard to know how to treat income when earning money from side hustles, especially when an individual has several, so the ATO has prepared some tips.


First, the individual needs to know if they are 'in business'. If so, they may need to think about registration and tax obligations. If they are not in business, but are looking to start one, they should know how to "set themselves up for success".


Also, if a side hustle means the individual is now a director of a company, they must make sure they apply for a director ID (which is free).


Please contact our office if you require any assistance in relation to your 'side hustles'.


ATO ride sourcing data-matching program


The ATO will acquire ride sourcing data relating to approximately 200,000 individuals to identify individuals that may be engaged in providing ride sourcing services during the 2022-23 financial year.


The data items include:

  • identification details (driver identifier, ABN, driver name, birth date, mobile phone number, email address and address); and
  • transaction details (bank account details, aggregated payment details, gross fares, net amount paid to driver, and all other income to which GST may or may not apply) of all payments received in the relevant period.


The data will be used to identify and inform ride sourcing providers of their tax obligations as part of information and education campaigns.


The intelligence obtained will increase the ATO’s understanding of the behaviours and compliance profiles of individuals and businesses that provide ride sourcing services, and may also be used as part of the methodologies by which the ATO selects taxpayers for compliance activities.



Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

Liability limited by a scheme approved under Professional Standards Legislation


July 7, 2026
High Court decision and ATO statement on Bendel’s Case The High Court recently handed down its decision in Bendel’s Case, confirming that an unpaid present entitlement (or UPE) between a discretionary trust and a beneficiary company does not fall within the extended definition of a “loan” for Division 7A purposes. The Australian Taxation Office released a Decision Impact Statement in response to the High Court findings, concluding the High Court's reasoning makes it clear that where a beneficiary company is entitled to a share of trust income that remains unpaid (a UPE) and the company takes no positive actions to call for payment of the entitlement, this will not fall within the expanded definition of a "loan" for Division 7A purposes. This is in contradiction to the ATO’s historical position that treated UPEs as "loans".
July 5, 2026
Government's tax reform package The Government has recently legislated several of the tax reform measures announced in the 2026 Federal Budget (and in later media releases). These include, among other things: Replacing the CGT discount with cost base indexation and a 30% minimum tax on gains accruing from 1 July 2027 (including gains on pre-CGT assets); Increasing the small business turnover threshold for the 50% active asset reduction from $2 million to $10 million; Limiting negative gearing for residential property to new residential dwellings from 1 July 2027 (subject to transitional rules); and Introducing the Working Australians Tax Offset from 1 July 2027, and the $1,000 instant tax deduction for work-related expenses from 1 July 2026. After a round of consultation, the Government has also announced further proposed measures, broadly including (among others): A new targeted CGT discount for investors in innovative start-ups; Barring SMSFs from utilising future limited recourse borrowing arrangements ( LRBAs ) to acquire residential property; and  Exempting income of discretionary testamentary trusts from the minimum tax proposed for trusts. We recently released a Tax Alert considering the legislation restricting SMSFFs using residential property LRBAs – to read click here . For full details of each of the 2026 Federal Budget announcements, please see our Federal Budget Tax Alert – to read click here .
June 28, 2026
Legislation restricting SMSFs using residential property LRBAs has now passed Parliament The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 ( the Reform No 1 Bill ) was passed by Parliament on Thursday 25 June 2026. Schedule 5 of the Reform No 1 Bill amends section 67A of the Superannuation Industry (Supervision) Act 1993 to restrict future limited recourse borrowing arrangements ( LRBAs ) on real property to investments in “business real property” (as defined in section 66 of the SIS Act). Residential property of any kind is excluded from the definition of “business real property” in section 66 of the SIS Act. We note this also excludes newly constructed residential property, which is a distinction at odds with recent exemptions being given to new-builds with other Budget Night tax changes relating to negative gearing and restricting the CGT 50% discount. Super funds are not generally allowed to borrow for investments, but there has been a concession allowing a self-managed super fund ( SMSF ) to borrow money to buy single assets like property, if their loans were set up in line with particular requirements, known as LRBAs. This change means an SMSF will not be able to borrow to buy residential property after the start date of these changes.
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