Effective from 1 April 2026, these measures are designed to provide immediate financial relief and improved cash flow flexibility for eligible businesses impacted by increased fuel expenses. Alongside a temporary reduction in fuel excise and adjustments to fuel tax credit rates, the ATO has launched a dedicated Fuel Response Plan to help affected taxpayers manage their tax obligations during this period of heightened cost pressure.

ATO options for impacted taxpayers

The ATO is offering streamlined access to a new temporary Fuel Response Plan in response to the impact of higher fuel prices on businesses.

Who may be eligible

Your business may qualify if you are an ABN holder and meet the following criteria:

• operating costs have increased directly due to higher fuel costs, or indirectly due to higher transport, logistics, or other supply chain costs
• you have incurred a new tax debt or are finding it difficult to meet existing payment arrangements
• you can demonstrate a reduced capacity to pay specifically as a result of increased fuel costs (separate to a general downturn in business or ordinary cash flow issues)
• all tax lodgements are up to date or will be brought up to date within three months.

Key features of the plan

The Fuel Response Plan includes a number of flexible support measures designed to assist with cash flow management, including:

• no upfront payment required
• up to 36 months to repay
• possible remission of General Interest Charges (GIC), subject to satisfying conditions
• equal monthly instalments to assist with cashflow management.

How SW can help

Navigating ATO support measures and determining eligibility can be complex, particularly where multiple financial pressures are involved. Our team can work with you to assess whether your business qualifies for the Fuel Response Plan, taking into account your specific circumstances and cash flow position.

We can also assist in preparing and lodging the applications with the ATO, including remissions of GIC, liaising on your behalf to streamline the process and improve the likelihood of a successful outcome. In addition, we can help you review your broader tax position, manage existing payment arrangements, assisting with cashflow forecasts and implement strategies to reduce business overhead costs, support cash flow and ongoing compliance during this period.

If your business is experiencing pressure from rising fuel costs, we encourage you to contact one of our experts to discuss how we can support you.

Contributors

Dee Newman

Nuwani Jayaweera

The post How the ATO’s Fuel Response Plan can support your business in 2026 appeared first on SW Accountants & Advisors.

The Treasury Laws Amendment (Payday Superannuation) Regulations 2026 support the Treasury Laws Amendment (Payday Superannuation) Act 2025, and although many provisions simply restate existing exclusions, these two amendments are especially relevant for employers.

SW’s specialist employment tax team breaks down below what these changes mean. Employers must assess the impact of the new qualifying earnings framework, identify transition period compliance risks, and design payday-based models ahead of the 1 July 2026 start date.

What the regulations confirm

The regulations confirm that the types of employees and payments that do not attract super will continue to be excluded under the new qualifying earnings framework. In practice, the regulations largely restate and consolidate existing exclusions rather than making any material changes to superannuation guarantee obligations.

For employers, the key takeaway is that the in/out rules are not where the real compliance impact sits. The bigger operational impacts come from tighter contribution deadlines and the consequences of late payments under the redesigned charge regime.

Administrative uplift encourages early payment and prompt voluntary disclosure

The most significant change for employers in the regulations is the new scalable administrative uplift, which forms part of the redesigned Superannuation Guarantee Charge (SGC). The uplift starts at 60% of the relevant shortfall and notional earnings (interest) components for a qualifying earnings day, but it can be reduced through specific mechanisms that are designed to reward early action.

Why it matters

The structure is intentional and is designed to reward employers who identify issues early, disclose voluntarily, and make prompt payments, while making late detection and delayed action more costly.

How the uplift can be reduced

Employers have several ways to reduce the uplift outcome, as outlined below.

Early payment before Australian Taxation Office (ATO) action

When a shortfall is corrected and paid in full before the ATO begins any assessment activity, the rules allow the uplift to be limited to the notional SG interest component rather than the full shortfall.

Early voluntary disclosure

The uplift rate is reduced on a sliding scale depending on how quickly a voluntary disclosure statement is lodged.

Good compliance history

If the Commissioner has not initiated an assessment or estimate process in the previous 24 months, the default uplift percentage can be reduced.

Administrative uplift at a glance

Practical implication

Under Payday Super, the cost of being late is no longer a simple fixed add-on. It is structured to encourage early remediation and voluntary disclosure, making it far more important for employers to have processes that detect superannuation issues quickly enough to preserve these reductions.

The Commissioner’s discretion is limited to exceptional circumstances

The regulations specify the exceptional circumstances in which the Commissioner can extend contribution deadlines, such as natural disasters or widespread technology outages affecting contribution platforms.

The key message for employers is that the Commissioner does not have broad discretion to waive timing failures in ordinary business scenarios. Outside genuinely exceptional events, employers are expected to have systems, processes, and governance in place to meet the received-by-the-fund timing requirements under Payday Super.

What employers should do now

With commencement from 1 July 2026, employers should prioritise the following:

• Map end-to-end timing from the pay event through the clearing house to fund receipt, including cut-offs and bounce-back scenarios.
• Build an early detection SG process with exceptions reporting, rapid triage, and a defined remediation pathway.
• Plan for voluntary disclosure readiness by establishing governance and documentation to support timely disclosure when required.
• Stress-test onboarding data quality to ensure contributions can be processed smoothly within the tightened operating environment.

How SW can help

SW’s specialist employment tax team supports employers in translating the Payday Super reforms into practical, compliant payroll and superannuation processes. We help employers assess the impact of the new qualifying earnings framework, identify transition period compliance risks, and design payday-based models ahead of the 1 July 2026 start date. Where issues arise, we also support early remediation and voluntary disclosures under the revised SGC framework.

Contributor

Thomas Grimsey-Carr

The post Payday Super Regulations released: What employers need to know and why early action matters appeared first on SW Accountants & Advisors.

The decision by the full Federal Court makes clear that informal arrangements and internal accounting entries are not enough to support deductions for related-party transactions. This case has particular significance to taxpayers who enter related party transactions with specific relevance to family groups that may currently lack the requisite written documentation. This case also has potential ramifications for corporate groups that are not consolidated for income tax purposes and cross border related party transactions.

The background

Two companies in the S.N.A Group entered into agreements with two asset-owning trusts for the use of rent rolls, trademarks, and associated assets in 2005. The agreements covered the period from 2005 until 2015, at which point they lapsed and were not renewed. Despite this, the operating companies continued to use the assets and continued to make payments after the agreements had lapsed, claiming the payments as deductible service fees.

The primary judge found in favor of the taxpayer, concluding that the taxpayers were subject to a presently existing liability and that the fees were therefore deductible under section 8-1. The primary judge held that, although there was no longer a written contract, the terms could be inferred from the parties’ conduct. The primary judge was particularly sympathetic to the commercial practice of small businesses, where related-party transactions are not always documented.

However, the Full Federal Court held that, there was no objective evidence after 2015 of communications between the parties, their bookkeeper, or their external tax accountant indicating that the companies were subject to a liability for the use of the assets. Nor were any tax invoices issued by the trusts. Furthermore, the method for calculating the payments for the use of the assets, which was based on the unitholders of the trusts receiving a specified percentage return, was inconsistent with the fees ultimately paid.

The making of payments and recording those payments in the books of related parties is not sufficient to infer a request for the provision of services or assets. Taxpayers must be able to objectively support a liability when charging fees for services and the use of assets by related entities. They should ensure that agreements between related parties are properly documented and kept up to date so as to cover the relevant period for which deductions are claimed.

Practical implications

Taxpayers who do not have written agreements, or who are unable to objectively demonstrate the existence of a contract are at risk of having deductions denied for transactions with related entities.

Contemporaneous documentation for related-party transactions should be prepared and regularly reviewed so that it covers the relevant period of any deductions and clearly details the method of calculation. Where documentation is not available, taxpayers should identify and retain other evidence to support the existence of a contract, including emails, minutes, invoices, or workpapers.

How SW can help

The decision in Commissioner of Taxation v S.N.A Group Pty Ltd [2026] FCAFC 10 makes clear that informal arrangements and internal accounting entries are not enough to support deductions for related-party transactions. Groups with inter-entity dealings should take this opportunity to review whether their agreements are properly documented and supported by objective evidence.

SW can assist by reviewing your existing related-party arrangements, assessing the robustness of your charging methodology, identifying gaps in contemporaneous documentation, and helping you update or formalise agreements to ensure they withstand scrutiny. Taking proactive steps now can significantly reduce the risk of deductions being denied in the future.

Contributors

Stephen Peries

Richard Osborn

The post Full Federal Court denies deductions for transactions between related parties appeared first on SW Accountants & Advisors.

The legislation was passed by both Houses on 4 November 2025, and the ATO is now publishing operational guidance while signalling a far more data-driven compliance approach.

What’s changing

• Super moves from quarterly to every pay run (weekly/fortnightly/monthly).
• Super is calculated on 12% of ‘qualifying earnings’ (QE), a new term the ATO is using to bring together ordinary time earnings (OTE) and related concepts for Payday Super.
• Funds must receive the contribution within 7 business days of payday, unless an extended timeframe applies.
• Employers generally have 20 business days to make contributions to a new employee’s fund, or when contributing to a new fund for an existing employee.
• Complex remediation and disclosure requirements for non-compliance and updated penalty regime.

Why hospitality and gaming will feel this first

High-frequency payroll and high variability can cause more ‘near misses’

Weekly pays, late roster approvals, and last-minute adjustments, such as meal breaks, allowances, overtime, and penalty rates, increase the risk of shortfalls and late payments when super must follow every pay event.

Casuals, turnover, and onboarding volume

More starters and leavers mean more stapling/choice workflows, fund changes, and edge cases, now with tighter timeframes and more scrutiny.

Complex multi‑function operating models

Hotels, pubs, clubs, and groups often operate across multiple entities, awards, sites, and payroll files. Payday Super magnifies the impact of:

• incorrect wage code configuration
• split pay cycles (front-of-house vs back-of-house, events, contractors)
• off-cycle runs (terminations, backpay, corrections).

Tips, allowances, loadings, and ‘what counts’

If your payroll wage codes aren’t cleanly mapped to what is (and isn’t) superable under the new QE approach, you could end up with systematic underpayments or overpayments across thousands of micro-transactions.

The ATO is moving toward more data and more targeted compliance

The Australian Taxation Office (ATO) has published a risk-based first-year compliance approach (PCG 2025/D5) that categorises employers as low, medium, or high based on payment behaviour. It also makes clear that the ATO must still apply the law if a shortfall exists, even for employers who otherwise appear ‘low risk’.

You are more likely to hear from the ATO where non‑compliance exists. The compliance approach also reflects a shift toward active, risk‑based employer profiling, separating genuine compliance efforts from those not attempting to comply and cases of serious non‑compliance.

Practical ‘must-do’ focus areas for hospitality and gaming

1) Payroll process testing and clean-up

Confirm, test, or redesign your roster-to-pay workflow to ensure it closes quickly enough to calculate and pay the correct QE and super each payday.

Build a controlled process for employee superannuation data acquisition and superannuation fund payment rejections.

2) Wage code and earnings mapping clean-up

Review every earnings type, including penalty rates, overtime, allowances, leave types, bonuses and incentives, commissions, reimbursements, tips and gratuities, and backpay.

Align your wage code configuration with Single Touch Payroll (STP) and Payday Super reporting and calculation requirements, and don’t wait until June 2026.

Perform high-level or detailed data testing as needed to assess current compliance or identify systematic errors.

3) Pay cycle readiness

Confirm whether your pay cycle can reliably meet ‘received by fund in 7 business day’ at peak periods, as public holidays and weekends are particularly relevant for venues.

Design a process for off-cycle runs so super doesn’t fall through the cracks.

4) Cashflow and working capital planning

Moving from quarterly to per-pay super will cause a shift in cash timing, so model this now across weekly pay cycles and seasonal trading peaks.

5) Shortfall detection and voluntary disclosure capability

Establish a repeatable monthly control to reconcile payroll superannuation liabilities with fund receipts.

Develop a documented workflow to identify shortfalls early, along with a methodology for calculating, preparing, and managing disclosures when required.

6) Decide who owns what

Payroll, finance, HR, venue operations, and system vendors need a single implementation owner and a tested calendar covering configuration, parallel run, control testing, and go-live.

How SW can help

At SW, we help businesses, including those in hospitality and gaming, navigate the new Payday Super changes, helping you stay compliant and reduce risk. We can review your payroll and rostering processes to ensure super contributions are calculated correctly on every pay, even with weekly cycles, casual staff, and variable rosters. We help design workflows that manage off-cycle payments, high staff turnover, and super fund changes efficiently.

Our team can also help you understand the cashflow impact of moving from quarterly to per-pay contributions and implement controls to detect any shortfalls early. We provide advice and support for voluntary disclosures if needed and coordinate across payroll, HR, and finance to make the transition smooth and manageable.

With our expertise, you can be confident that your business is ready for Payday Super and that you can focus on running your operations without unnecessary stress.

The post Payday Super is coming for hospitality & gaming: Are your payroll and rostering systems ready for 1 July 2026? appeared first on SW Accountants & Advisors.

Impacted taxpayers  

From the 2026 income tax year and onwards, it is anticipated that groups with the following super funds or managed funds will be required to lodge an RTP:   

Background to the RTP Schedule  

Currently, large companies, which are part of groups that lodge Australian income tax returns disclosing $250m or more in revenue are required to lodge the RTP Schedule with their annual income tax return. The ATO provides further detail here. 

The RTP Schedule is designed to identify uncertain tax positions that large companies may have. It consists of three categories, each of which must be considered and completed. 

Category A  

Category A requires disclosures of material positions that are either:  

Category B  

Category B requires disclosures of:  

Category C  

Category C requires disclosures of:  

Potential areas of concern for large super funds and funds  

Whilst not an exhaustive list, the following taxpayer alerts and PCGs may be relevant to impacted super funds and other funds, and need to be considered as part of the completion of the RTP Schedule:  

How SW can help  

This is another example of the ATO gathering more data from taxpayers regarding arrangements it believes may give rise to Australian tax leakage, or where there is uncertainty in the Australian tax treatment. 

Although details are limited, these expected changes will impact larger funds and super funds for those completing their 2026 income tax return, as they will need to undertake a rigorous analysis to determine if they have a reporting obligation in the RTP Schedule.  

Our experts can assist you with identifying arrangements that are on the ATO’s radar, helping you better understand and proactively manage the appropriate tax treatment before the ATO raises any queries. This will give you greater certainty.   

We can also assist you in completing the RTP Schedule.   

Please reach out to your SW advisor for support from our team. 

Contributor

Stephen Peries

The post ATO expands Reportable Tax Positions Schedule to large super funds and CIVs appeared first on SW Accountants & Advisors.

With 2026 land tax assessments just around the corner, these changes bring key obligations and deadlines that warrant close attention. 

Absentee owner surcharge – notification by 15 January 

The absentee owner surcharge (AOS) is an additional land tax imposed on properties owned by absentee individuals or entities (essentially foreign owners of Victorian land). As of 2026, the AOS is a 4% surcharge on the taxable land value, levied on top of regular land tax. It applies broadly to both residential and commercial land holdings.  

15 January 2026 was the cut-off for absentee owners to notify the SRO of their status, if they were an absentee as of 31 December 2025. Every year, foreign owners must declare their absentee status by 15 January so that the SRO can apply the surcharge in the upcoming land tax assessment. If an owner fails to notify but is later identified as foreign, the SRO will back-charge the surcharge and may impose penalties for the late notification. 

It’s worth noting that exemptions from AOS are very limited. Generally, only developers undertaking substantial development projects (which provide economic benefits to Victoria) might obtain a temporary exemption from the surcharge. Passive foreign investors or landlords are unlikely to be eligible for the exemption. Therefore, affected owners should ensure they have notified the SRO on time and factor the surcharge into their investment returns. 

If you’re an absentee owner and did not yet notify for 2026, contact the SRO immediately. Although the 15 January deadline has passed, making a late notification voluntarily may help reduce penalties. 

Short stay levy – first annual returns due 30 January 2026  

The short stay levy applies to short stays in Victoria from 1 January 2025, on bookings that are less than 28 consecutive days (not including the checkout day). The levy of 7.5% of the total booking fee is to be collected and paid by either: 

The first annual short stay levy return is due on 30 January 2026, with owners, booking platforms, and tenants being required to register before lodging their first return if they have a liability. It should be noted that booking platforms do not need to register individual properties. 

Booking platforms and property owners or tenants who accepted short-stay bookings during 2025 must register for the short stay levy and submit their first annual return by 30 January 2026, provided their total booking income did not exceed $75,000. 

Providers whose short-stay accommodation bookings generated more than $75,000 in 2025 are required to lodge quarterly returns, with the next instalment due by 30 April 2026. 

Failure to register and comply with payment obligations may result in the SRO initiating recovery action for any outstanding levy amounts, along with applicable penalties. 

Vacant residential land tax – notification by 15 February & expanded scope  

VRLT is a state tax designed to discourage empty properties and increase housing supply. Since 2018 it has applied an annual tax (1% of a property’s value, increasing to 3% for long-term vacancies) on residential homes in Melbourne that were vacant for more than 6 months in the preceding year. From 1 January 2025, residential houses in regional Victoria are also subject to VRLT.   

Owners of such properties must notify the SRO each year and then pay VRLT on their land tax bill if liable. Owners of vacant residential land in 2025 are required to notify the SRO by 15 February 2026 of the property’s vacancy status. This notification is mandatory even if you believe an exemption applies (e.g. for newly built homes, holiday homes, or other exempt categories). The SRO uses these notifications to issue VRLT assessment notices for the 2026 tax year. Failure to notify the SRO by 15 February may result in penalties being applied. Owners who have already notified that they are exempt (such as under a holiday home exemption) do not need to notify the SRO again, provided their circumstances have not changed.

Perhaps the biggest change is the expansion in the scope of VRLT. From 1 January 2026, VRLT will apply to land in Metropolitan Melbourne that is capable of residential development but has remained undeveloped for at least 5 years. This will apply to land that is vacant and land with a residence that is partly built but has not been occupied. In other words, long-term ‘land banking’ will now likely attract VRLT. 

The Commissioner of State Revenue (Commissioner) has a discretion to extend this 5-year period. Broadly, the Commissioner will consider residential land as ‘not vacant’ for a tax year if construction of a residence has not commenced after five years and the owner: 

In considering whether to exercise discretion, the Commissioner may take into account factors such as site access limitations, findings related to cultural heritage, environmental or ecological constraints, extreme weather events, delays in utility connections, and ongoing planning appeals. More information on the factors considered can be found in the Government Gazette. 

Heightened SRO compliance focus in FY2026 

The SRO has significantly ramped up its compliance efforts for the 2025–26 financial year, following a year in which more than 90% of its 13,300+ investigations uncovered non-compliance, resulting in $888 million in assessed liabilities. This year, the SRO is targeting high-risk areas across land tax, vacant residential land tax, and absentee owner declarations, with a particular focus on incorrect exemption claims, undeclared absentee ownership, and failure to notify vacant or undeveloped land. 

Property owners and investors should expect increased scrutiny, especially where land is incorrectly receiving principal place of residence or primary production exemptions, or where VRLT and absentee owner surcharge notifications have not been lodged. The SRO is also closely monitoring properties claiming the holiday home exemption and land held in a trust or by foreign owners. With advanced data-matching tools, the SRO is well-positioned to detect and penalise non-compliance. Early engagement, accurate reporting, and professional advice are essential to avoid reassessments and penalties. 

How SW can help 

Navigating Victoria’s 2026 land tax environment can be complex, with new levies, expanded obligations, and heightened SRO scrutiny. SW can assist you in navigating these obligations by assessing landholdings to determine potential liabilities under the rules, ensuring all relevant notifications are submitted on time, and implementing strategies to minimise exposure to penalties and reassessments. 

Contributor

Blake Trad

The post Navigating Victoria’s 2026 land tax environment appeared first on SW Accountants & Advisors.

Our Employment Taxes Update series is an exclusive event tailored for the Corporate, NFP and Government sectors. In each session, our experts will delve deeper into the ever-evolving world of employment taxes, offering you a unique opportunity to stay well informed to empower your organisation to navigate the complexities of the current tax landscape with confidence.

Session details

Session 1: Payday Super – What you need to know ahead of 1 July

A significant reform to superannuation means the super guarantee will need to be paid in line with salary and wages from 1 July 2026. With the ATO taking a proactive compliance approach, this change will require updates to your payroll processes, systems and internal controls to ensure you remain compliant.

This session will help you understand what these changes mean for your business. Get insights into the broader implications, learn a practical roadmap to help you prepare and walk through the latest compliance details released by the ATO.

Hear from Paul Hum, Tax Director and Employment & Payroll Tax Specialist, who has guided organisations through complex payroll reviews and regulatory changes.

Session 2: FBT update

In this session, our experts Jason Ch’ng and Rahul Sanghani will provide you with an update on:

• New and topical developments including:
  • Grandfathering provisions for Plug-in Hybrid Electric VehiclesCourt case – benefits provided to owners
  • ATO compliance activity including employee contributions
• FBT recap and savings opportunities for cars, dual cabs, carparking, entertainment, exemptions, combining business & personal travel and exemptions & rebates for not-for-profits
• Use of FBT software to streamline FBT Return preparation process.

Date

Session 3: Employee share schemes and reporting obligations, incentives, ESAS

This informative session will provide the benefits of employee share schemes, including different plan structures, designs and alternatives, tax reporting obligations and the employee shares scheme start-up concessions. Kurt Tiam of Dentons Australia Limited will join our tax expert Justin Batticciotto for a discussion on how to design and implement an effective ESS plan and the key terms to consider.

Session 4: Employee vs contractor

Our tax expert Paul Hum and Vanessa Priest will walk through the latest employment tax and income tax developments, including how the rules treat contractors and what this means for your business. We will touch on current audit activity, the Fair Work and common law changes affecting employee vs contractor assessments, and the practical issues we see when clients get reviewed.

We will also discuss the Commissioner’s updated personal services income guidance, providing context that may assist you when negotiating terms or engaging labour‑based contractors.

We will demonstrate how technology can support better contractor governance, from improving data matching to strengthening review processes and reducing manual work.

This session will provide the latest developments in legislation and case law, regulator practices and leveraging technology to assist with compliance.

Who should attend?

• Tax managers and their support staff
• Human resource management/remuneration and benefits managers
• Other staff interested in employer tax compliance, such as CFOs, financial controllers, CEOs and directors

Expert speakers

Stephen O’Flynn
Director
SW

Paul Hum
Director
SW

Vanessa Priest
Director 
SW

Kirsty McDonnell
Director
SW

Rahul Sanghani
Associate Director 
SW

Jason Ch’ng
Head of Tax Information Solutions
SW

Justin Batticciotto
Associate Director 
SW

The post Employment Taxes Update series 2026 appeared first on SW Accountants & Advisors.

Stay ahead in a rapidly evolving tax environment with Tax Chat, our complimentary six‑part webinar series designed for SMEs, advisers and private groups. Delivered by our tax specialists, Ned Galloway, Kate Wittman and Vanessa Priest, each session explores the most significant tax rulings, cases and regulatory developments shaping today’s landscape.

Building on more than 50 years of collective experience, our experts go beyond technical updates to unpack what the changes really mean in practice. From identifying risks and opportunities to navigating complex legislative frameworks with confidence, Tax Chat offers clear, commercially grounded guidance you can apply immediately.

Session details

Webinar 1

Webinar 2

Webinar 3

Date

Wednesday 27 May 2026

Location

Online nationally – via Zoom webinar

Time

12pm – 1pm (AEST)

9am – 10am (Perth)

11am – 12pm (Brisbane)

Webinar 4

Date

Wednesday 22 July 2026

Location

Online nationally – via Zoom webinar

Time

12pm – 1pm (AEST)

9am – 10am (Perth)

11am – 12pm (Brisbane)

Webinar 5

Date

Wednesday 16 September 2026

Location

Online nationally – via Zoom webinar

Time

12pm – 1pm (AEDT)

9am – 10am (Perth)

11am – 12pm (Brisbane)

Webinar 6

Date

Thursday 12 November 2026

Location

Online nationally – via Zoom webinar

Time

12pm – 1pm (AEDT)

9am – 10am (Perth)

11am – 12pm (Brisbane)

Expert speakers

Vanessa Priest
Director

Ned Galloway
Associate Director

Kate Wittman
Senior Consultant

The post Tax Chat webinar series 2026 appeared first on SW Accountants & Advisors.

The Alert raises the ATO’s concerns about certain property development management agreements. These typical arrangements are used by taxpayers to segregate the development risks from the land-owning entity. TA 2026/1 is another instance of the ATO seeking to apply Part IVA which is a significant development that will have a broad impact across many property developers.

Characteristics of arrangements under review

Those property development arrangements under review, typically involve:

The ATO has concerns that the arrangements are contrived to artificially separate land ownership and development activities to gain a tax timing advantage, being:

• upfront deductions in Dev Co that would not be available to the landowner
• the repeated deferral of income recognition.

The ATO has a specific concern that the repeated utilisation of development losses can result in the economic group perpetually deferring paying tax on group profits and enabling wealth extraction.

The ATO has indicated that Part IVA anti-avoidance provisions may apply to these types of arrangements.

ATO actions

The ATO has confirmed that they will:

• publish a Practical Compliance Guideline outlining a risk framework
• engage with taxpayers that are undertaking these types of arrangements.

How SW can help

TA 2026/1 is another example of the ATO seeking to apply Part IVA to a once typical arrangement. This is a common structure used by taxpayers to segregate the development risks from the land-owning entity. Whilst we have been aware of rumblings in this area from the ATO, this is a significant development that will have a broad impact across many property developers.

SW will provide more detail once the draft Practical Compliance Guideline is released and will discuss TA 2026/1 with any impacted clients.

Our experts can assist with advising how TA 2026/1 affects your existing arrangements. We can also engage with the ATO to deal with potential disputes.

Reach out to your SW advisor for support from our team.

The post Developing trouble: ATO Alert on related party development management agreements appeared first on SW Accountants & Advisors.

The ruling, titled Income tax: rental property income and deductions for individuals who are not in business (‘the ruling’), along with two practical guidance guides, replaces the longstanding IT 2167. It targets non-business rental properties, especially holiday homes, short-term rentals, and mixed-use properties.  

Key points from the draft: 

We provide further commentary on this matter below. 

Assessable rental income 

Any amounts derived from rent, lease premiums, licence fees or other similar charges are assessable income for a rental property. This includes amounts received through an agent, a sharing or online platform such as Airbnb, or directly from a tenant. 

Any of the above amounts received will form part of the property owner’s assessable income, even if the income is not received at commercial arm’s length rates.  

Certain amounts received under family arrangements, such as the payment of board to a parent, may not be treated as assessable income. 

Deductions and apportionment of expenses 

Property owners can claim deductions for losses or outgoings to the extent that they are incurred in gaining or producing assessable income from the property, provided they are not capital, of a private or domestic nature, or prevented from being deductible under another legislation. 

As such, property owners may only claim deductions to the effect that it relates to their assessable rental income. For mixed-use properties, where the property owner is also using it for personal or family purposes, then deductions must be appropriately apportioned to account for this private use. 

PCG 2025/D6 provides guidance and factors when apportioning costs, including: 

Certain costs such as advertising, property agent fees, and cleaning fees are fully deductible and do not require apportionment. 

Holiday homes – increased stringency 

The most notable change in the draft ruling is the ATO’s increased stringency on holiday homes.  

A ‘holiday home’ refers to a property that is used, or held for use, for a person’s holidays or recreation, or for the holidays or recreation of their family members and friends, either for no rent or at a reduced rate. 

Where a person’s rental property is a holiday home, the ATO may regard the property as a ‘leisure facility’ for the purposes of s26-50 of the ITAA 1997 and deny certain deductions such as land tax or council rates. This is to prevent taxpayers from obtaining a tax subsidy for expenditure on their own recreation.  

However, the ruling provides an exception to this where the holiday home is used, or held for use, mainly to produce assessable income in the form of rents, lease premiums, licence fees or similar charges.  

PCG 2025/D7 provides a risk framework and factors to consider when determining if the property is used, or held for use, mainly to produce assessable income, including: 

Transitional relief 

The ATO has allowed a transitional period, during which they will not allocate compliance resources to review whether properties fall under s26-50 before 1 July 2026, provided the relevant expenses arise from arrangements entered into before 12 November 2025.

How SW can help 

Property owners should be aware that the ATO will have increased scrutiny on rental deductions.  

SW can help assess your property’s position under the draft ruling, review your usage patterns, ensure deductions are correctly apportioned, and provide practical guidance on what evidence and apportionment methods you’ll need going forward.  

Our team can provide tailored guidance and help you understand how these changes may affect your properties and tax obligations, ensuring you stay well-prepared and informed. 

Contributor

Dylan Kelly

The post Rental properties and holiday homes: ATO’s new draft ruling appeared first on SW Accountants & Advisors.