What is considered ‘genuine testamentary purposes’?

While the announcement provides welcome updates, the Government has not yet defined what constitutes ‘genuine testamentary purposes’.

Further guidance is needed to determine whether the exclusion will apply broadly to all testamentary trusts established under a valid Will, or whether additional conditions will need to be satisfied. This will be an important area to monitor as consultation progresses.

Limitation to deceased estate assets

The Government has indicated that the exemption will be limited to income derived from assets of the deceased estate.

While the detail has not yet been released, this may be intended to prevent additional assets from being contributed to a testamentary trust and benefiting from the exemption.

Impact on trusts established on or after 1 July 2028

For discretionary testamentary trusts established on or after 1 July 2028, the exemption will only be available where beneficiaries are limited to individuals and income tax exempt entities.

This raises several practical questions for existing estate plans and testamentary trust structures, including:

• when is the testamentary trust established?
  • when the Will is executed
  • when the Will-maker dies
  • when probate is granted
  • when the assets are transferred to the testamentary trust.
• whether existing Wills will need to be updated to limit distributions from discretionary testamentary trusts to individuals and income tax exempt entities
• what happens if the Will-maker no longer has capacity to change their Will
• if an existing Will contains a discretionary testamentary trust and the person dies after 1 July 2028, can the discretionary testamentary trust still distribute to a company without the 30% tax?

How SW can help

We can assist in reviewing your existing Wills and testamentary trust structures in conjunction with your lawyers to assess the impact of the proposed changes and identify any required updates. We can also provide guidance on how the new rules may apply in practice, including the proposed post-1 July 2028 beneficiary restrictions, and support clients as further detail and legislation are released.

We encourage you to speak with your current SW advisor or contact our consultants, Heather Dyke and Taylah Cooke, if you would like to understand how these changes may impact your estate planning and testamentary trust arrangements.

Contributors

Heather Dyke | Associate Director, Business and Private Client Advisory

Taylah Cooke | Manager, Business and Private Client Advisory

The post Proposed testamentary trust rules: Understanding the 30% minimum tax exemption appeared first on SW Accountants & Advisors.

This year’s result forms part of SW’s long-standing commitment to the CEO Sleepout, with the firm raising more than $630,000 over the past 10 years. Across that decade, 41 SW people have taken part in the event, with five participants returning more than five times!

In 2026, ten SW partners participated in the annual event, including CEO Duane Rogers and Chair Steve Allan, alongside returning participants Chris Dexter, Stephen O’Flynn, Vincent Shi, Jeremy Wicht, Michael Goodrick, John Dorazio, and Bessie Zhang, as well as first-time participant Matthew Hingeley.

The Vinnies CEO Sleepout brings together leaders from across Australia to raise critical funds and awareness for people experiencing, or at risk of, homelessness. Funds raised support Vinnies’ frontline services, including emergency accommodation, meals, crisis support, mental health and wellbeing support, and pathways towards long-term stability.

SW extends its sincere thanks to the many clients, colleagues, friends, family members, and members of the broader community who contributed to this year’s outstanding result. Donations, shared fundraising efforts, and messages of encouragement all played an important role in helping the team exceed its fundraising goal.

“This result reflects the strength of our community and the willingness of so many to make a meaningful contribution. We also acknowledge the sustained generosity of the Wood Foundation, whose support over the past decade has made a significant contribution to SW’s fundraising efforts and to Vinnies’ work supporting people experiencing homelessness.” said SW CEO, Duane Rogers. “Every dollar raised will go towards providing practical assistance and hope to those who need it most.”

While the CEO Sleepout is a one-night event, the impact of the funds raised continues well beyond the night itself. With approximately 58 per cent of Australians experiencing homelessness under the age of 35, the need for sustained support remains significant.

Through the generosity of supporters, Vinnies can continue to provide safe and stable accommodation, emergency relief, meals, crisis support, and pathways into education and employment.

Media contact

 Amanda Lee  | Chief Marketing Officer
alee@sw-au.com  | M: +61 430 322 306

The post SW raises over $126,000 for the 2026 Vinnies CEO Sleepout, contributing to more than $630,000 over 10 years appeared first on SW Accountants & Advisors.

What this means for you

If your business is involved in property transactions or related advisory services, you may now fall within scope of the AML/CTF regime under the Tranche 2 reforms — whether you’re a real estate agency, property developer, advisory firm, or providing transaction support.

Services most likely to be captured include:

• brokering, facilitating, or advising on the sale, purchase, or transfer of real estate
• supporting ownership structuring or restructuring for property holdings
• acting in arrangements involving companies, trusts, or nominee structures
• providing registered office or business addresses linked to property entities.

Importantly, the rules apply based on the nature of the service, not just your job title or firm type.

Why this matters

Regulators view property transactions as high-risk for money laundering, particularly where complex ownership structures or large capital flows are involved.

Recent enforcement action against non-compliant entities (outside real estate) underscores AUSTRAC’s willingness to apply significant penalties:

• up to $6.6 million for individuals
• up to $33 million for companies

Key dates to act on:

• 31 March – 29 July 2026: Enrol with AUSTRAC
• By 1 July 2026: AML/CTF program must be in place
• From 1 July 2026 onward: Ongoing compliance obligations apply

What you need to do now

Real estate and property businesses should act immediately to:

• assess whether your services are ‘designated services’
• register with AUSTRAC within the required timeframe
• develop and implement an AML/CTF program, including:
  • customer due diligence (CDD)
  • risk assessment
  • transaction monitoring and reporting
  • record keeping and governance controls
• assign clear internal responsibility for AML/CTF compliance.

Impact on your clients

You should expect increased friction in transactions:

• clients will need to provide identity verification and ownership details
• in some cases, source of funds / source of wealth information
• delays or disengagement may occur if information is not provided promptly.

This is particularly relevant for:

• high-value property transactions
• foreign investment or cross-border structures
• trust and corporate ownership arrangements.

Bottom line

This is a fundamental shift for the property sector. Many businesses that have never been regulated under AML/CTF will now face formal compliance obligations.

Early preparation will be critical — both to avoid penalties and to minimise disruption to transactions and client relationships.

How SW can help

Our AML/CTF specialists can help you understand how the Tranche 2 reforms apply to your business and develop a practical, risk-based compliance framework. We can assist with assessing whether your services are captured, preparing and implementing AML/CTF programs, conducting risk assessments, establishing customer due diligence and reporting processes, and supporting AUSTRAC enrolment requirements.

To discuss your obligations and readiness for the 1 July 2026 commencement, reach out to our AML/CTF experts.

Contributors

Lawrence Lau | Associate Director, Business and Private Client Advisory

The post AML/CTF: Immediate action required for the real estate & property sector appeared first on SW Accountants & Advisors.

With Payday Super commencing on 1 July 2026, employers have limited time to ensure processes, systems, and controls are capable of operating in a near real-time compliance environment.

While the policy objective is straightforward, the practical impact is significant. The change increases both the frequency of obligations and the consequences of getting them wrong, particularly given the redesigned superannuation guarantee charge (SGC) framework and the ATO’s expected shift to a more proactive, data-driven compliance approach.

What this means

The move to Payday Super requires employers to transition from a periodic compliance model to an ‘always-on’ reporting and payment environment. Key changes for employers include:

• More frequent payments – super is now tied to every payroll cycle.
• Greater ATO visibility – near real-time monitoring of compliance through Single Touch Payroll (STP).
• Reduced tolerance for manual intervention – tighter deadlines limit the ability to resolve errors post-payroll.
• Increased importance of data quality – particularly employee fund details and onboarding processes.

While the headline change is simple, the operational shift is significant, moving from periodic to continuous compliance.

Key risks

• Missed or late contributions triggering SGC penalties under a more punitive framework.
• No ability to rely on late payment offsets as a remediation strategy for the June 2026 quarter.
• Increased payroll processing and reconciliation complexity.
• Cash flow pressure from more frequent payments.

Importantly, these risks are not theoretical. Most employers will encounter timing failures or shortfalls under a higher-frequency model, making the ability to detect and respond early critical.

Transition-related risk during the first 28 days of July 2026

There are two traps in the changeover to Payday Super, and both can bite in the first month.

Late payment offset gone for the June quarter:

• If you miss the June 2026 quarter SG deadline and pay late, there is no late payment offset.
• You pay the super fund, then pay full superannuation guarantee charge to the ATO on the same amount, and the SGC is not deductible.
• That is a double payment on the June quarter.

Contributions pulled back to the June quarter:

• Any contribution you pay between 1 and 28 July is applied to a leftover June quarter shortfall first, before it can go to a July payday.
• So if a June shortfall is still sitting there, your early-July contributions get soaked up by June, even though you meant them for July.
• That leaves your July paydays short, and you have a Payday Super shortfall unless you top up within 7 business days.
• One unpaid June liability ends up causing two problems: the double payment on June, and fresh shortfalls in July.

Recommendation:

• Pay all your June quarter super in full before your first July payday. With nothing left owing on June, your July contributions land where you intend.
• If a June shortfall slips through and is still unpaid after 28 July, recalculate your July paydays on the basis that the early-July payments have been reallocated to June, and fix any July shortfall within the 7 business day window.

What employers should focus on now

• Confirm payroll calculations align to qualifying earnings.
• Mapping end-to-end contribution timing (payroll → clearing house → fund receipt).
• Validate employee super data and fund details.
• Implementing exception reporting and rapid issue resolution processes.
• Put in place controls to quickly resolve failed or rejected payments.

Recommendations by employer size

Small businesses (basic payroll / limited resources)

Focus on simplicity and reliability by:

• using fully integrated payroll software with automated super processing
• reviewing default fund and employee details to avoid failed payments
• aligning pay cycles and super processing (avoid manual batching)
• building a weekly/fortnightly cash flow discipline.

A key priority is avoiding missed deadlines by using automation instead of relying on manual workarounds.

Mid-sized employers (in-house payroll teams)

Focus on control and consistency by:

• reviewing payroll configuration for qualifying earnings accuracy
• introducing payment monitoring and exception reporting
• strengthening onboarding processes (stapled fund, data completeness)
• testing end-to-end timing: payroll cut-off → payment → fund receipt.

A key priority is reducing rework and managing exceptions quickly within the 7-day window.

Large / complex organisations (multi-entity, high volume payroll)

Focus on governance and scalability by:

• reviewing end-to-end payroll architecture (systems, clearing houses, integrations)
• implementing real-time reporting dashboards using STP data
• strengthening controls around rejected payments and fund allocation
• reassessing cash flow and treasury planning for high-frequency outflows
• conducting scenario testing (peak payroll volumes, system failures, cut-off risks).

A key priority is ensuring systems and controls can handle volume, complexity, and real-time compliance expectations.

Final observation

Payday Super is a shift to always-on compliance. Employers that have robust systems, accurate data, and disciplined processes will transition more smoothly, while those relying on manual processes will face higher risk.

How SW can help

We can help organisations get ready for Payday Super by reviewing payroll processes end to end, identifying compliance gaps, and strengthening systems, controls, and reporting. We work with employers to design practical, scalable solutions that reduce risk, improve data accuracy, and support readiness for real time compliance.

This includes payroll and superannuation health checks, STP and system alignment reviews, process optimisation, and support with automation and control design across small, mid-sized, and complex multi entity environments.

Get in touch with our Payday Super experts to discuss how we can support your transition and ensure your organisation is compliant with the latest requirements.

Contributors

Oliver McDonald | Consultant, Tax

The post Payday Super is nearly here: What employers need to do appeared first on SW Accountants & Advisors.

Importantly, the Australian Taxation Office (ATO) has confirmed that there is no substantive change to its interpretation of the underlying goods and services tax (GST) law, commonly known as the ‘Netflix Tax’.

Instead, the draft ruling clarifies and expands upon the existing guidance by addressing both parts of the Australian consumer test, incorporating the safeguard approach, and expanded compliance guidance.

Residency and consumer elements – greater focus on consumer limb

The definition of an Australian consumer remains unchanged and continues to require both the residency element and the consumer element to be satisfied. That is that the recipient is an Australian resident for income tax purposes and is either not registered for GST, or if registered, does not acquire the supply for the purpose of an enterprise.

However, GSTR 2026/D1 significantly expands on the consumer element, which was only lightly addressed in GSTR 2017/1. The earlier ruling focused more heavily on residency indicators, such as billing address and IP data, with comparatively limited practical guidance on GST registration and the purpose of acquisition.

The draft confirms that where a recipient provides an Australian business number (ABN) and represents to the supplier that they are registered for GST, a supplier may rely on that representation not only to establish GST registration, but also to conclude that the acquisition is made for enterprise purposes.

The safeguard approach under section 84-100

A central feature of the draft is the clearer articulation of the ‘safeguard approach’ under section 84-100. While not new, it is now framed as a more structured methodology for forming a reasonable belief about whether a recipient is not an Australian consumer.

This approach provides a pathway for suppliers to treat a supply as ‘not made to an Australian consumer’, provided they:

• collect specified information (e.g. ABN, declarations that the recipient is registered for GST)
• maintain consistent records
• apply defined system controls.

The key being that the supplier has undertaken all reasonable steps to form its conclusion.

Where the safeguard approach is followed, a greater level of certainty and protection is provided to the supplier, particularly for automated or high-volume environments where individual review is impractical.

Attribution and compliance approaches

The draft expands guidance on timing and attribution, making it clear that a recipient’s status is generally determined at the time of invoice or receipt of consideration. This is particularly important for subscription and other ongoing arrangements, where a customer’s circumstances may change over time or additional information becomes available after the initial transaction.

The draft also introduces more detailed compliance approaches, particularly in relation to the consumer element safeguard. For initial supplies to a recipient, greater leeway is provided where an ABN check indicates that the recipient is not registered, but the recipient has provided evidence of registration to the supplier.

For ongoing supplies, more structured processes are expected, including:

• ongoing monitoring (e.g. regular ABN Lookup checks at least every 6 months)
• annual GST registration verification.

The draft reiterates that suppliers may rely on comparable jurisdiction approaches (EU, UK, NZ, and Norway) for determining residency.

Where suppliers operate outside the safeguard, reliance is generally limited to information already held within their systems to determine only if the recipient acquires the supply for the purpose of its enterprise.

How SW can help

GSTR 2026/D1 does not change the legal framework, but it clearly raises expectations around how businesses implement and provide evidence of compliance. In particular, the increased focus on GST registration, the consumer element, and ongoing verification means more structured processes will be required than under GSTR 2017/1.

Businesses should review their onboarding procedures, ABN validation processes, and system controls to ensure they align with the draft and can support a defensible position if reviewed by the ATO. Early alignment with the ATO’s compliance approaches will help reduce risk and improve consistency across cross-border transactions.

The ATO has invited public comments on the draft ruling, with submissions due by 24 July 2026.

If you would like to understand how these changes may impact your cross-border GST obligations, please contact your SW advisor or speak with our GST specialists.

Contributors

Dylan Kelly | Senior Consultant, Tax

The post Know your consumer: ATO’s new draft ruling for GST cross-border supplies appeared first on SW Accountants & Advisors.

Consistent with the draft, the final determination sets out the Commissioner’s view on when an ancillary fund is taken to ‘provide a benefit’ for the purposes of:

• subsection 15(4) of the Guidelines (minimum distribution requirement)
• subsection 22(3) (prohibition on benefits to related entities).

While TD 2026/3 largely adopts the draft position, there are targeted refinements that are particularly relevant for trustees in practice.

Comparison – TD 2025/D3 (Draft) vs TD 2026/3 (Final)

The changes between the guidance in its draft and finalised form have been summarised in the table below.

From a structural perspective, TD 2026/3 closely mirrors TD 2025/D3. The substantive changes are broadly confined to:

• paragraphs 22 – 29 in the draft (now paragraphs 23 – 27) which deal with non-binding promises of future payment
• the addition of a more detailed Appendix addressing enforceability of commitments.

Outside of these areas, the guidance remains materially unchanged.

Key clarification – non-binding promises and when a benefit is ‘provided’

The final determination refines the guidance around non-binding promises of future payment. In this section, the ATO confirms that:

• a benefit is only ‘provided’ where it is actually conferred on the DGR (i.e. the fund must cause the DGR to have the benefit)
• a non-binding promise of future payment does not constitute a benefit, as it creates no legal right or entitlement for the DGR
• accordingly, arrangements such as:
  • grant approvals
  • notifications
  • accounting entries
• will not amount to the provision of a benefit unless they result in a legally binding obligation.

This is illustrated through expanded examples, including multi‑year pledges and non-binding grant notifications, which show that an intended or announced payment is insufficient without a binding commitment.

Whilst TD 2025/D3 expressed the same principle, it only dealt with it briefly and included a single example. TD 2026/3 builds on this by expanding the explanation of non-binding promises, introducing additional examples and more clearly distinguishes between a mere expectation of payment and a legally enforceable obligation.

The underlying position is unchanged, but the final determination makes the practical application much clearer.

The included Appendix to TD 2026/3 provides important context for the revised non‑binding promise analysis by focusing on when a commitment gives rise to a legally binding obligation. In particular, paragraph 58 explains that a promise to make a future payment will not generally be binding where:

• the trustee is committing in advance to the outcome of a discretion that must be exercised later
• the promise restricts the trustee from making the relevant discretionary decision at the time the payment is to be made
• the trust deed does not permit the relevant power to be exercised at the time the promise is made.

In these cases, the promise does not create any legal rights in favour of the DGR and therefore does not result in the provision of a benefit. More broadly, the Appendix reinforces that the analysis turns on the legal effect of the trustee’s actions under the governing trust deed, including whether a power has been validly exercised to bind the fund and confer enforceable rights at the relevant time. This highlights that, for the purposes of subsection 15(4), the focus is on whether a binding obligation arises, rather than the trustee’s intention, approval, or communication of a proposed grant.

Key takeaway

TD 2026/3 represents a finalisation of the ATO’s draft position, with only limited drafting changes. However, the refinements to the treatment of non‑binding promises are significant in practice.

Trustees must ensure that distributions are legally effective at the relevant time, rather than relying on informal approvals or expectations. While narrow in scope, these changes directly affect minimum distribution compliance and year-end risk management and should be carefully considered in the administration of ancillary funds.

How SW can help

SW can assist ancillary funds in ensuring that any benefits they wish to provide fall within the scope of the Guidelines as clarified in TD 2026/3. We can review proposed distributions and related party arrangements to confirm they meet the ATO’s definition of a ‘benefit’ and do not trigger penalties under subsection 22(3).

For assistance in establishing or managing a fund, please contact our private client specialist, Heather Dyke.

Contributors

The post ATO finalises guidance on when ancillary funds ‘provide a benefit’ appeared first on SW Accountants & Advisors.

Introduction

Australia’s first mandatory sustainability reports have now been lodged, and the early lessons are already clear. ASIC has shared some of its own observations from reviewing this first wave of reports.

Our SW Sustainability experts have also drawn on our experience supporting first-wave reporters, and we are seeing that the biggest challenges are not purely technical. They often sit at the intersection of judgement, governance, data quality, and documentation.

For organisations preparing for upcoming reporting cycles, the first wave provides a useful preview of where effort is needed most. Regulators have also started to signal their areas of focus, including the need for clear, decision-useful disclosures, defensible judgements, and reporting that aligns with the statutory framework under Chapter 2M and AASB S2.

Below are some of the practical insights we are seeing from the first wave of sustainability reporting in Australia and what they may mean for businesses getting ready to report.

Materiality is where many of the hardest judgements begin

Climate-related risks and opportunities sit at the centre of the reporting process. The challenge is not just identifying them, but assessing and documenting them in a way that is both business-relevant and reporting-ready.

One of the clearest lessons from the first wave is that education and engagement matter. For many boards, management teams, and operational stakeholders, sustainability reporting is still new.

Structured workshops can be an effective way to identify risks and opportunities. They serve a dual purpose by building management’s understanding of sustainability reporting and capturing the input needed for the report, along with the supporting documentation that underpins key disclosures.

A key lesson is the need to link climate risk to business risk. Some organisations initially conclude that they do not face significant climate risk. In practice, climate-related matters often overlap with existing business risks such as water availability, energy costs, asset resilience, and supply chain disruption. These issues may already be managed operationally, but they still need to be assessed through a climate-reporting lens.

When identifying the risk, transition risks in the value chain are also easy to overlook, even though the assessment may need to extend beyond the reporting entity itself.

Once risks are identified, the next step is to apply a clear materiality framework to determine what should be reported. That framework should evolve over time as the organisation builds capability, refines its understanding, and responds to input from stakeholders, auditors, and the market.

Materiality is not just about identifying material risks. It also requires judgement about what information about those risks matters to users. Where an organisation has already been affected by events such as flooding or bushfire, users may reasonably expect disclosure of that experience and its future implications, even if the historical financial impact was not, on its own, quantitatively material. This is consistent with ASIC’s early observations on sustainability reporting.

Greenhouse gas reporting is as much a process challenge as it is a data challenge

For many first-time reporters, greenhouse gas reporting has highlighted that the issue is not simply whether data exists, but whether it is sufficiently complete, consistent, and reliable for reporting and assurance purposes. Questions often arise around what to do when data is incomplete, how to use estimates appropriately, and how to document the basis for key assumptions.

A recurring practical issue is the need to reconcile emissions data back to underlying operational and financial records. For example, electricity data may need to be checked against site lists, invoices, or lease registers to support completeness. This is often where reporting teams discover that existing systems were not designed with external reporting in mind.

It is also important to recognise that some inputs are not static. Emission factors, global warming potential assumptions, and data sources can change over time. This means organisations need a methodology that is not only technically sound, but also documented well enough to explain changes from one reporting period to the next. AASB S2 specifically requires disclosures about greenhouse gases and the methods, assumptions, and inputs used.

Most organisations begin with manual processes, especially in the first year. That is often a practical starting point, but it quickly becomes clear that stronger internal processes and review controls are needed. Internal sense-checking is critical. In early cycles, teams are still building the experience needed to identify anomalies or challenge unusual results, so draft outputs and iterative review become an important part of getting to a robust result.

For larger groups, the complexity increases quickly. Different subsidiaries, business units and jurisdictions may rely on different source systems, definitions, and data owners. Starting early and avoiding assumptions about data availability are both critical.

Governance disclosures require more detail than many expect

Governance has emerged as one of the key focus areas in first-year reporting. While some organisations expected this section to be relatively straightforward, in practice it often requires careful drafting because the disclosures are qualitative, specific, and closely tied to how climate-related matters are actually governed within the business.

This is an area where it pays to slow down and work through the disclosure requirements carefully. Organisations need to balance the detailed requirements in AASB S2 with the broader legal and governance context under the Corporations Act, including the responsibilities of directors and those charged with governance.

The most effective governance disclosures tend to explain climate-related oversight in the context of the existing business rather than describing climate as a separate overlay. Existing board, management, and risk committee structures may already address relevant business risks. The task is often to identify where climate-related responsibilities already sit, where gaps remain, and how those roles and processes should be described clearly in the report.

Assurance readiness should start earlier than most teams think

The assurance process is still relatively new for many preparers, auditors, and boards. One practical lesson from the first wave is that organisations should allow more time than they initially expect for auditor review, challenge, and iteration. Multiple rounds of questions are common, and that needs to be built into the overall reporting timetable from the outset.

Good documentation makes a significant difference. A well-prepared internal paper trail can reduce friction during assurance by showing how conclusions were reached, what alternatives were considered, and where management judgement was applied.

In many cases, the published sustainability report is only the end product. It does not, by itself, show the underlying process, judgements, and evidence that sit behind the disclosures. That is why supporting documentation matters. This may include long lists of risks and opportunities considered, materiality assessments, rationale for inclusion or exclusion, records of scenario choices, and explanations of key assumptions. In practice, the draft report can be a useful checklist for identifying where further internal documentation is needed.

Key judgements and significant reporting decisions should also be summarised and presented to senior management and the board in a way that aligns with the organisation’s governance structure. This not only supports internal oversight, but also helps auditors understand the business context and the basis for management’s conclusions.

Key takeaway: First-year reporting does not need to be perfect, but it does need to be disciplined

One of the clearest messages from the first wave is that organisations should not let the pursuit of perfection delay progress. Sustainability reporting capability will evolve over time. What matters in the first year is establishing a proportionate, well-governed, and evidence-based process that can support the disclosures being made. In many cases, the act of drafting the report itself helps sharpen governance, data processes, and internal accountability.

ASIC’s observations

From ASIC’s media release on their initial observations from sustainability reporting, we note the following key points:

• 259 sustainability reports were lodged for the year ended 31 December 2025.
• ASIC observed a meaningful increase in both quantity and quality of climate-related financial information compared to prior voluntary disclosures.

However, some key deficiencies and areas for improvement were noted as follows:

Inappropriate disclaimers

Statements limiting reliance or responsibility (e.g. ‘not for investment decisions’) are not permitted and may mislead users.

Incomplete risk identification

Some entities failed to incorporate past events and known exposures when assessing future climate risks.

Weak disclosure of judgements/assumptions

Lack of clarity around key estimates and uncertainties reduces decision-usefulness.

Information overload risk

Excess voluntary disclosures can obscure material AASB S2 information.

Cross-referencing issues

Non-compliant references (e.g. to websites or unclear sections) were observed.

Climate-related targets

Inconsistent interpretation, entities must include targets required by law/regulation (e.g. Safeguard Mechanism).

ASIC expectations for 30 June 2026 reporters include:

• use ‘reasonable and supportable’ information, including forward-looking data
• ensure clear, proximate disclosure of key judgements and uncertainties
• maintain discipline on materiality and clarity, avoiding clutter
• ensure strict compliance with AASB S2 and RG 280, particularly for cross-referencing.

How SW can help

Whether you are just starting your sustainability reporting journey or preparing for assurance, we can support your team with:

• materiality assessments, including the identification and evaluation of climate-related risks and opportunities
• facilitated workshops that engage management and gather information, serving the dual purpose of capability building and supporting the reporting process
• greenhouse gas reporting and the drafting of sustainability reports
• preparing for assurance readiness
• targeted training for boards and management
• preparation of the internal documentation needed to support judgements and disclosures.

Contributors

Jimmy Cao

The post First-wave sustainability reporting in Australia: Practical lessons from ASIC and SW’s team of experts appeared first on SW Accountants & Advisors.

This is a landmark outcome for the taxpayer. The High Court has dismissed the Commissioner’s appeal, confirming that UPEs arising from a trust’s setting aside of its distributable income to a private company beneficiaries will not be classified as a loan for Division 7A purposes. However, the decision of the High Court may only benefit a small number of taxpayers on the basis that:

• The decision appears to be limited to the particular fact pattern. Critical to the High Court’s decision was the specific terminology used in the distribution minute and deed to ‘set aside’ net income to be held in a ‘separate trust…pending payment’.
• There doesn’t appear to be an ability to unwind unpaid present entitlements that were previously converted to legal form complying Division 7A loans.
• The provisions of Subdivision EA within Division 7A could have applied to tax Mr Bendel, rather than the 2005 Trust.
• Section 100A must still be considered where there is a retention of funds by the trustee.
• The Federal Budget has introduced a proposed 30% minimum tax on discretionary trust distributions, expected to apply from 2028, which will eliminate the benefits of distributing to corporate beneficiaries from a discretionary trust.

In this alert, we outline the final decision and what this means in practice for clients with Division 7A exposures.

High Court outcome confirms position

The High Court has confirmed the earlier Full Federal Court decision, but found that:

• This UPE does not constitute a loan under Division 7A. However, central to this decision is the specific wording included in the trust deed and resolutions. The effect of the deed and resolutions was to create a fixed trust over the property representing the net income for each period and without further actions by Gleewin Investments, there was no debtor creditor relationship. However, if the trust deed and resolutions contained words to the effect that net income “be applied” and the “application [be] effected by crediting the said amounts to such beneficiaries in the books of the trust” there may have been a debtor creditor relationship.
• Leaving an amount unpaid under a separate fixed trust does not amount to the provision of financial accommodation unless the amount has been called for by Gleewin Investments.
• Subdivision EA was the appropriate provisions within Division 7A to tax the arrangement. Subdivision EA applies where a trust has an unpaid present entitlement to a corporate beneficiary and the trust subsequently makes a loan, payment, or forgives a debt to the shareholder or associate of the shareholder of the private company. In this particular case, the 2005 Trust had made loans to Mr Bendel, whilst there were subsisting unpaid present entitlements.

Why this matters

For more than 15 years, the ATO has treated UPEs as Division 7A loans, requiring taxpayers to:

• enter into complying loan agreements
• structure sub-trust arrangements
• make principal and interest repayments to avoid deemed dividends.

The High Court decision overturns this administrative approach, representing a fundamental shift in the application of Division 7A for particular trust structures.

We would recommend that a detailed review of the trust deed and resolutions is undertaken prior to seeking any amendments to assessments. As we mentioned at the beginning of this alert, there will be small number of taxpayers with a very particular fact pattern that will benefit from this decision.

It will be interesting to see whether there are legislative changes made prior to the commencement of the proposed budget changes and the ATO’s response. We will provide further alerts if this happens.

How SW can help

The High Court decision in Bendel creates an opportunity to revisit Division 7A positions, but it also requires careful consideration to manage risk and ensure compliance with broader anti-avoidance rules.

SW can assist by reviewing your trust structures and existing Division 7A arrangements, assessing the treatment of UPEs and any historical exposures, and advising on how the proposed 30% minimum tax may impact your overall structure.

Contributors

The post Division 7A update: High Court confirms Bendel decision on UPEs appeared first on SW Accountants & Advisors.

Upcoming ATO reporting obligations

The ATO requires employers that issue shares or share options to employees to complete their reporting obligations. The deadlines to comply with the reporting requirements are:

• ESS statements are due to be issued to employees by 14 July 2026
• ATO reports are due for lodgement with the ATO by 14 August 2026

What do the ATO reporting obligations mean for you?

Our innovative solution | CTS ESS Toolkit

Our CTS ESS Toolkit, an ATO-approved and compliant software solution, enables employers to simplify their online annual employee share scheme reporting obligations.

We are one of only a handful of providers to have passed ATO testing and have ATO approval for our specialised software. Using the CTS ESS Toolkit, SW has been successfully working with businesses to meet their ESS lodgement requirements.

The table below outlines the types of companies that are most likely to benefit from using the CTS ESS Toolkit.

Significant global entities (SGE)

SGEs are entities that have an annual global turnover of A$1bn or more. SGEs are subject to increased Failure to Lodge (FTL) penalties for late lodgement of every ATO document or approved form. The SGE penalties are currently $165,000 for each 28 days in which an approved form is lodged after the due date, up to a maximum of $825,000. The lodgement of ESS reporting falls within this definition.

The public officer of the company is responsible for the company’s obligations under the income tax law, including the timely lodgement of approved forms with the ATO. If your company is part of an SGE, we recommend implementing systems to ensure timely lodgement of ESS reports with the ATO.

How SW can help

There is limited time to meet ESS reporting requirements, and the ATO is placing particular emphasis on ensuring corporates comply with timely and accurate reporting obligations.

Now is the time to ensure your business is prepared for the reporting season. We offer a fully outsourced ESS reporting service or a software licensing option.

Please contact Sam Morris or Justin Batticciotto to learn how to comply with the ATO reporting requirements and to discover how our CTS ESS Toolkit can assist.

2026 Federal Budget announcement

Whilst the 2026 Federal Budget does not directly impact the ESS rules, the proposed capital gains tax (CGT) reforms, which would replace the 50% CGT discount with inflation indexation and introduce a minimum 30% tax rate from 1 July 2027, will change the benefit of some ESS plans for employees. As a result, ESS structures, particularly for start-ups, may become less tax advantaged and may require redesign if the proposed changes proceed without any adjustments for start-ups.

Additional services

ESS plan and review

We can conduct a comprehensive review of your ESS framework and plan(s) to support your business in understanding and addressing key areas. As part of this review, we can:

• assess your existing share scheme structure
• confirm whether awards are taxed at grant or deferred
• identify payroll tax implications and risks
• provide clear guidance on ATO and state reporting obligations
• review prior year ESS reporting for errors or gaps
• prepare and lodge amendments and voluntary disclosures
• liaise with the ATO and state revenue offices
• help minimise penalties, interest, and audit risk
• advise on new plan design or changes to existing schemes
• assist with annual reporting and documentation.

Contacts

Sam Morris
E: smorris@sw-au-com

Justin Batticciotto
E: jbatticciotto@sw-au.com

The post Simplify employee share scheme reporting with the CTS ESS Toolkit appeared first on SW Accountants & Advisors.

Join our Property Development specialists online as they unpack these key developments and what they mean in practice.

Developers are facing increasing complexity across funding models, profit allocation arrangements and governance. This webinar will provide a clear, practical overview of the evolving tax and structuring landscape, and what you need to know to manage risk and support future projects.

Topics include:

• Property development structures and emerging ATO focus areas
• PCG developments and governance considerations
• Federal Budget updates impacting the property sector

The webinar will also include an opportunity for discussion and questions with our specialists.

SW Speakers

Blake Rodgers
Director, Business & Private Client Advisory 

Sejla Kadric
Director, Business & Private Client Advisory 

Matt Birrell
Director, Tax

The post Property Developers update webinar  appeared first on SW Accountants & Advisors.