December 2025 Essential Tax Summary

ATO guidance on rental deductions, plug-in hybrids and reminders for end-of-year celebrations.

The ATO has issued a draft tax ruling and some practical compliance guidelines dealing with rental property income and deductions for individuals. As well as refreshing and modernising some existing guidance, the new materials suggest that the ATO is seeking to apply a specific integrity rule to prevent certain deductions from being claimed in connection with holiday homes, even if they are used to produce income. This will come as a surprise to many practitioners and their clients.

The ATO has also provided a new seven-step methodology that can be used to calculate electricity costs for home-charging plug-in hybrid electric vehicles that run on both electricity and petrol/fuel. Until now, the PCG only covered fully electric vehicles.

As the festive season approaches, the ATO is also reminding taxpayers about the potential FBT implications of end-of-year employee celebrations and gifts.

As change occurs, we’ll keep you posted through Fortis’ social media accounts.

From the Government

New Legislation Passes to Ensure Super is Paid on Time Tax

The new payday super rules are now law. This means employers will need to pay superannuation for their employees at the same time, or very close to when they pay salary and wages.

From 1 July 2026, employers must pay super into their employees’ super funds within seven business days of paying their pay. If the fund does not receive the super contributions within this timeframe, the employer may have to pay the superannuation guarantee charge.

With this change, the ATO will also be able to spot unpaid super more quickly and see which employers are low risk and which are high risk when it comes to making super contributions.

Australia-Croatia Tax Treaty

The Government has signed a new tax treaty between Australia and Croatia, the first double tax agreement between the two countries. It is designed to reduce double taxation and make cross-border business and investing easier.

Key tax changes under the treaty:

• Dividends
  • A general 10% withholding tax rate will apply to dividends.
  • A lower 5% rate will apply to certain intercorporate dividends paid on non-portfolio shareholdings (larger, more significant interests).
• Interest
  • Interest payments will be subject to a 10% withholding tax rate, which is consistent with Australia’s usual settings.
• Royalties
  • The withholding tax rate on royalties will be reduced to 10%, compared with Australia’s current default rate of 30%.

Other important points:

• Both Australia and Croatia can still apply their own laws to prevent tax evasion or avoidance.
• The treaty should:
  • reduce compliance costs
  • provide more certainty
  • lower tax costs for clients with business or investment dealings across Australia and Croatia.

From the Regulators

Payday Super

The ATO has updated its website guidance on the new payday super measures.

From 1 July 2026, employers will need to pay superannuation guarantee (SG) at the same time as salary and wages. SG contributions must reach employees’ super funds within 7 days of payday.

To support this, the ATO will upgrade SuperStream contributions messaging to version 3. This includes a new member verification request (MVR), which lets payroll and software systems check an employee’s super fund details before a contribution is made.

Before 1 July 2026, clients should:

• Talk to their payroll / digital service provider
  • Ask when their software will support improved error messaging and the new MVR.
  • Review error messages currently received from super funds. Payments that now go through with only a warning or information message might be rejected after 1 July 2026.
• Confirm payment timeframes
  • Find out when payroll systems, clearing houses or super funds will be ready to support the New Payments Platform (NPP).
  • Check whether any updates are needed and how long payments will take to reach the super fund.
• Review default super fund details
  • Make sure default fund registration details are up to date and correct.
• Stay informed
  • Watch for updates from the ATO, digital service providers and super funds so any system or process changes can be made in time.

Super Guarantee Reporting

The ATO is reminding employers to make sure the employee and payroll information they report through Single Touch Payroll (STP) is accurate.

The ATO uses STP data to work out whether employers are meeting their super guarantee (SG) obligations by matching SG amounts reported with contribution data from super funds.

To help keep SG reporting correct, employers should:

• Check STP information is accurate and current
  Make sure all employee details are correct, the payment date is right, and reports are lodged on time. If dates or details are wrong, the ATO might not match the right pay periods.
• Use valid TFNs
  Record and report a valid tax file number (TFN) for all eligible employees.
• Use the correct ABN
  Always provide the correct ABN in both STP reports and when making super contributions. If contributions are made without an ABN or with a different ABN from the one in STP, the ATO may not be able to match contributions to the right employer or employees.
• Monitor error messages
  Regularly check for any STP or super contribution error messages from the ATO, payroll software, clearing houses or super funds.
• Fix issues quickly
  If an error message appears about STP reporting or super contributions, employers should resolve it as soon as possible. They can refer to the ATO’s guidance on STP reporting issues and errors for next steps.
• Stay SuperStream compliant
  Make sure systems and processes meet SuperStream requirements so employee super funds can report contributions correctly to the ATO.

Lodgment Deferral for CBC Reporting

The ATO is providing a lodgment deferral for Country-by-Country (CbC) reporting entities for their CbC reporting obligations (Local file, Master file and CbC report) until 30 January 2026, due to the holiday period.

This applies to reporting periods that ended on 31 December 2024 and originally had a due date of 31 December 2025. The deferral is automatic, so there is no need to apply.

Tax Schemes

The ATO is reminding taxpayers how to recognise tax schemes and the warning signs to watch for.

Some tax advisers look for ways to exploit the law and promote tax and super schemes that promise benefits which are not legally available. They may also incorrectly claim that their schemes are supported by ATO rulings.

For example, some schemes target Australians planning for retirement by:

• telling them to move money in and out of their SMSFs in ways that are not allowed
• promising early access to superannuation assets even though a condition of release has not been met.

These schemes often aim to:

• reduce a participant’s taxable income
• increase deductions against their income
• increase tax offsets
• inflate refunds
• avoid tax and other obligations entirely
• access super benefits before a condition of release is met.

Many schemes involve complex transactions or distort how funds are used to hide tax or other obligations. They may try to:

• incorrectly classify revenue as capital
• exploit concessional tax rates
• hide the true source of funds or the relationships between parties
• release super funds early in breach of the law
• move funds through several entities, such as a series of trusts including SMSFs, to avoid or reduce the tax that would normally be payable.

If the ATO identifies an arrangement that is high risk, it may issue a taxpayer alert to give an early warning on the types of schemes it is concerned about.

Barter Credit Tax Schemes

The ATO is warning the community to stay away from a new tax scheme involving barter credits, a type of alternative currency some business networks use.

The ATO has seen an increase in schemes where people inflate deductions for donations of barter credits to deductible gift recipients (DGRs). Both promoters and taxpayers involved in these arrangements could face serious consequences.

It is legal for DGRs to accept barter credits as donations. The problem arises when people take part in schemes that artificially increase the value of those credits for tax deduction purposes. These arrangements can be treated as fraud and may trigger an ATO investigation.

A common example looks like this:

• A person pays a small amount of cash to a barter exchange.
• In return, they receive barter credits that have a face value higher than the cash paid.
• They donate these barter credits to a DGR.
• They then claim a tax deduction based on the inflated face value, not what the credits are really worth.

People involved in these schemes may have to:

• repay the tax they tried to avoid
• pay significant penalties and interest
• face possible legal action.

Under the promoter penalty laws, the ATO can also apply substantial civil penalties to anyone who promotes unlawful tax schemes.

Thin Capitalisation and DDCR for Private Groups

The ATO is reminding practitioners that, when preparing tax returns for private group clients, they should not overlook the thin capitalisation rules and the debt deduction creation rules (DDCR).

Since the 2023 changes and the introduction of the DDCR from 1 July 2024, these rules now affect more private groups and their associates than under the old regime. The ATO has already seen mistakes, particularly where exemptions are claimed without properly including associate entities.

Key tips from the ATO when preparing tax returns:

1. Check the $2 million threshold correctly
   When working out if a client falls under the $2 million debt deductions exemption, include the debt deductions of all associate entities, not just the main entity.
2. Lodge the International dealings schedule where required
   If the thin capitalisation rules and DDCR apply to a client, make sure the International dealings schedule is completed and lodged with the tax return.
3. Consider DDCR with related-party funding
   If a client has used a related-party arrangement, such as a Division 7A loan, to:
   • fund the acquisition of an asset from an associate, or
   • fund a payment or distribution to an associate, you need to consider both the DDCR and Division 7A. The DDCR can also apply to deny debt deductions from historical arrangements and transactions, not only new ones.
4. Keep strong records
   Ensure clients keep accurate and complete records that clearly explain and support their tax positions in relation to these rules.

Avoid Delays When Winding up a SMSF

The ATO is reminding clients what they need to do when winding up their SMSF. To avoid errors and delays, it’s important that the final SMSF annual return (SAR) is correct the first time it’s lodged.

Clients should:

• Keep their contact details up to date so accountants and tax agents can reach them quickly.
• Finalise all outstanding transactions and pay any remaining debts.
• Keep the SMSF bank account open until the wind-up is confirmed. Closing it too early can delay final reconciliations or refunds.
• Roll over most of the SMSF’s assets to another fund before lodging the final SAR. A second rollover should occur after lodgment, once any tax debt is paid or a refund is received.

After lodging the final SAR, SMSFs have 28 days to complete the final rollover before the fund is officially wound up.

If all member benefits are not rolled out within this timeframe, it can lead to:

• significant delays in winding up the fund
• being unable to use SuperStream
• the need to lodge an additional SAR if assets remain after the wind-up date.

ATO Tax Dodger Tip-offs

The ATO is reminding taxpayers that it receives almost 1,000 tip-offs every week from people reporting suspected tax evasion.

Most of these relate to shadow economy activity, such as businesses:

• asking for cash payments
• incorrectly claiming business expenses.

This year, the ATO is seeing a surge in red flags in three key industries:

• Building and construction
• Cafés and restaurants
• Hairdressing and beauty services.

Dental Expenses are Private

The ATO is reminding taxpayers that certain costs are considered private expenses and cannot be claimed as tax deductions. This includes both preventative and necessary dental treatment, as well as other expenses related to personal appearance.

Examples include

• dental expenses, such as check-ups and treatments
• teeth whitening
• makeup and skin care products
• shaving products
• haircuts and other grooming services

These expenses are not deductible even if a client is required to maintain a particular standard of appearance for their job, or if they receive an allowance to cover grooming costs.

FBT and Workplace Celebrations

The ATO is reminding employers to be aware of their FBT obligations for end-of-year celebrations, including staff parties, events and gifts. In some situations, these may be exempt from FBT.

Examples of benefits that may be exempt include:

• Food and drink for employees on site
  Food and drink provided to current employees and consumed on the business premises on a working day.
• Low-cost functions offsite
  Food and drink provided to employees or their associates (such as partners) at a venue off the business premises, where the cost is less than $300 per person and the benefit meets the conditions for a minor benefit.
• Small, infrequent gifts to employees
  Gifts given infrequently to employees with a value of less than $300 per person, where the minor benefit conditions are met.
• Low-cost recreational activities
  Recreational activities, such as a golf day, that cost less than $300 per person and meet the minor benefit requirements.
• Benefits provided to business clients
  Benefits provided to business clients are not subject to FBT.

Payroll Governance

The ATO is increasing its focus on payroll governance and reminding employers of their key obligations, including:

• Pay as you go (PAYG) withholding
• Single Touch Payroll (STP)
• Fringe benefits tax (FBT)
• Superannuation guarantee

Clients should make sure their payroll governance is set up properly, with systems and processes that suit the business’s structure, size, complexity and industry. These systems need to support compliance with legal obligations and help identify, assess and manage risks such as administrative errors, employee fraud and cybercrime.

Payroll and accounting staff should have the right skills and knowledge for their roles, and businesses should maintain strong record-keeping and stay up to date with any payroll changes or updates.

Alternative providers to the SBSCH

The ATO is reminding taxpayers to prepare for the permanent closure of the Small Business Superannuation Clearing House (SBSCH) on 1 July 2026 by finding an alternative service now.

Moving early to a new superannuation payment solution will help employers stay compliant and will allow clients to:

• set up replacement processes for SG payments for the January–March and April–June quarters (for employers who currently pay quarterly)
• reduce the risk of late SG payments for the April–June 2026 quarter (due 28 July), as the SBSCH will no longer be available
• adjust business cash flow settings to support more frequent SG payment cycles
• complete final payments and download any required reports before the SBSCH is permanently decommissioned.

Employers still using the SBSCH should be aware of these key dates:

• 10 December 2025 – super payments and instructions must be received by 5:30 pm AEDT. Payments received after this time will not be processed until 2 January 2026.
• 28 January 2026 – SG quarterly due date.
• February–March 2026 – recommended timeframe to transition to an alternative SG payment option.
• 28 April 2026 – SG quarterly due date.
• 3 June 2026 – final day to use the SBSCH, make last payments and download reports.
• 1 July 2026 – SBSCH permanently unavailable.

Many organisations may already have suitable alternatives in place. Existing software or payroll systems may include superannuation payment functionality. Where this is not available, options may be sourced from:

• superannuation funds
• digital service providers
• payroll software providers
• commercial clearing houses.

ATO End-of-Year Closures

The ATO’s holiday closure period will run from 12:00 pm on Wednesday, 24 December 2025, until 8:00 am on Friday, 2 January 2026.

During this time:

• ATO offices will be closed
• phone support services will be unavailable
• customer responses on ATO social media pages will pause and resume after reopening.

Rulings, Determinations & Guidance

GST on Supplies of Formula Products

The ATO has issued a draft GST determination explaining when the supply of a formula product is GST-free under section 38-2 of the GST Act.

The draft sets out the ATO’s interpretation of the term “infant” and explains which formula products qualify for GST-free treatment under table item 13 of Schedule 2. This provision grants GST-free status to beverages, and beverage ingredients, that are of a kind marketed principally as food for infants.

The ATO’s draft view is that GST-free treatment under table item 13 applies only to formula products marketed for children up to 12 months of age. Products marketed for children older than 12 months don’t meet the “infant” condition and therefore fall outside the GST-free concession.

The draft determination also confirms that formula products do not qualify for GST-free treatment under table items 1 or 2 of Schedule 2, as they are neither of the listed kinds (milk or powdered milk) nor made up of at least 95% of those products.

Rental Property Income and Deductions for Individuals

The ATO has issued draft Taxation Ruling TR 2025/D1, which gives guidance to individuals who earn income from rental property, including short-term rentals or renting out a room in their home.

The draft ruling covers:

• when amounts received for the use of a rental property are assessable income
• when losses or expenses related to a rental property can be claimed as deductions
• how to apportion deductions when a property is used partly to earn income and partly for private purposes
• when certain deductions for a holiday home that is also used as a rental property will be denied because it is a “leisure facility” under section 26-50 of the ITAA 1997.

While the draft ruling updates and modernises existing guidance, the stronger focus on the leisure facility rules in section 26-50 is likely to surprise many clients who own holiday homes and use them to earn some rental income during the year.

If a client holds a holiday home and it is not used or held mainly to derive assessable income during the year, section 26-50 can deny deductions for the following expenses, even if the property is sometimes rented out:

• interest on money borrowed to acquire the property
• council rates
• land tax
• repairs and maintenance.

The ATO acknowledges that it has not previously set out its views on section 26-50 in the context of rental properties. It also notes that some taxpayers may already be in arrangements that fall within section 26-50 without realising it.

Because of this, the ATO has stated that it will not use compliance resources to review whether section 26-50 applies to expenses incurred before 1 July 2026 on holiday homes that are rental properties, provided the expenses were incurred under an arrangement that was entered into before 12 November 2025.

This draft ruling replaces IT 2167 Income Tax: Rental properties – non-economic rental, holiday home, share of residence, etc. cases, family trust cases, which was withdrawn on 12 November 2025.

Apportionment of Rental Property Deductions

The ATO has issued draft Practical Compliance Guideline PCG 2025/D6, which explains its compliance approach to apportioning rental property deductions where a property is used partly to earn income and partly for another purpose.

Where part of a dwelling is rented out, and the rest is occupied by the owner, deductions for losses and expenses must be worked out on a “fair and reasonable” basis to determine how much is allowable under section 8-1 of the ITAA 1997.

The draft guideline outlines apportionment methods the Commissioner considers fair and reasonable in common situations, including:

• Time-based method – taking into account the number of days the property or part of the property is rented or available for rent
• Area-based method – based on the floor area used to produce income compared to private use
• Combination method – where both time and area are relevant.

Individuals can use a different apportionment method, but if they do, they fall outside the protection of the guideline and will need to show why their method is fair and reasonable in their specific circumstances.

Application of the Leisure Facility Rules to Holiday Homes

The ATO has issued draft Practical Compliance Guideline PCG 2025/D7, which explains its proposed compliance approach to how the leisure facility rules in sections 26-50 may apply to holiday homes.

Section 26-50 denies deductions for losses or outgoings that relate to the ownership or use of a holiday home, unless an exception applies.

The draft guideline:

• applies only to individuals
• does not apply where a rental property is used in the course of carrying on a business
• does not apply to entities other than individuals.

To help work out how it will allocate compliance resources, the ATO uses a colour-coded risk framework, summarised below.

PCG 2025/D7 – Holiday homes risk framework

Risk zone	Behaviour for s 26-50	Compliance approach
Green zone (low risk)	– High levels of income-producing occupancy, particularly around peak holiday seasons, where the property is most desirable as a holiday destination. – Limited personal or other non-commercial use of the property. – Prioritising deriving income from the property over other purposes. – Commercial terms for renting out the property. – Attempts to maximise income from the use of the property, for example, through rents, lease premiums, licence fees or similar charges.	The Commissioner would not expect to apply compliance resources to consider the application of section 26-50 to arrangements in the green zone, other than confirming that the features of the scenario are present in your circumstances.
Amber zone (medium risk)	– Increased personal use of the property by the taxpayer and friends (for no cost or below market rates). – Forgoing income so the property is available for personal use (either actual use or making it available for private use). – Using the property, or holding it available, for personal non-income-producing use in peak income-producing periods. – Limited attempts to exploit the property to gain rents, lease premiums, licence fees or similar charges.	The Commissioner may apply compliance resources to consider whether section 26-50 applies.
Red zone (high risk)	– Prioritising personal use of the property by blocking out times for personal use each year, particularly in periods of high rental demand. – Limited attempts to rent out the property. – Major features of the property, or parts of the property that are rented out, are inaccessible even when the property is being used by guests. – Unreasonable restrictions on potential renters that contribute to low overall occupancy. – Little or no attempt to increase occupancy to earn rents, lease premiums, licence fees or similar charges. – Advertising the property at a price above market rates.	These arrangements will attract ATO attention. The ATO may carry out a more detailed review of the facts and circumstances to consider the application of section 26-50 as a priority, which could lead to an audit.

Shares Held by a Trust Retain Their Pre-CGT Status

The ATO has released a draft update to GSTR 2012/6, giving specific guidance on how the GST rules apply to modern build-to-rent (BTR) developments when working out if the premises are commercial or residential premises.

GSTR 2012/6 explains how to decide whether a property is commercial or residential premises for GST purposes. Supplies of commercial residential premises are usually subject to GST if the supplier is registered.

The draft update adds a new example involving a contemporary BTR development. The ATO’s view is that these developments will usually be treated as input-taxed supplies of accommodation in “normal” residential premises, rather than taxable supplies of commercial residential premises. This is because BTR properties are designed for longer-term occupation and the occupants are treated as tenants, not as hotel-style guests.

The draft amendments also give more detail on the features that distinguish hostels from other accommodations, and on the different status of guests versus tenants. This is intended to help taxpayers work out whether premises should be treated as residential premises or commercial residential premises for GST purposes.

PAYG withholding variation for company directors

The ATO has released a draft legislative instrument called Taxation Administration (PAYG Withholding Variation for Company Directors and Certain Office Holders) Legislative Instrument 2026. It deals with how PAYG withholding applies where fees are paid to an individual, but the money is really for an entity such as their company or firm.

In simple terms, it applies where a person is paid in their role as a director, office holder or committee member, and they are required to pass the full amount on to another entity.

Key points from the draft:

• Withholding rate reduced to nil
  • The PAYG withholding rate is reduced to 0% (nil) on these payments, as long as the individual must pass the full amount to a second entity.
• No PAYG payment summary or STP reporting
  • Employers or payer entities will not need to issue a payment summary for these payments.
  • They will also not need to report the payments through Single Touch Payroll (STP).
• Reason for the change
  • The aim is to avoid PAYG withholding and reporting where, in substance, the payment belongs to an entity, not the individual who briefly receives it.
• Replacement of the old instrument
  • Draft LI 2025/D24 will replace the existing PAYG Withholding Variation: Company Directors and Office Holders (F2016L00222), which is due to sunset on 1 April 2026.
  • The new instrument is largely the same as the 2016 version, but it adds the STP reporting exemption to reflect how reporting has changed since then.

Provision of benefits by ancillary funds

The ATO has released draft Taxation Determination TD 2025/D3, which explains when a private or public ancillary fund is considered to be providing a benefit under:

• the Taxation Administration (Private Ancillary Fund) Guidelines 2019, and
• the Taxation Administration (Public Ancillary Fund) Guidelines 2022.

Key points from the draft:

• The determination looks at the meaning of:
  • “provision of benefits” in section 15(4), and
  • “provide any benefit, directly or indirectly” in section 22(3) of the Guidelines.
• The ATO’s view is that a “benefit” is not limited to:
  • payments of money, or
  • transfers of property.
• A benefit can be anything that puts a DGR or related entity in a better position, for example:
  • relieving a related entity of an obligation or liability
  • taking on a cost or responsibility that the related entity would otherwise have to meet.
• Section 22(3) is drafted broadly. It expands:
  • what counts as a benefit, and
  • the different ways a benefit can be provided, whether directly or indirectly.

Commissioner’s Discretion to Retain a Refund

The ATO has updated its practice statement PS LA 2011/22, which explains when the Commissioner can decide to hold on to a taxpayer’s refund instead of paying it out straight away.

The key updates are:

• Longer time to notify taxpayers
  Section 6 has been updated to reflect the extended period in which the Commissioner must tell a taxpayer that they have decided to retain an RBA surplus that arises under the BAS provisions. This update follows changes made by the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025.
• Updated example for producer rebate cap
  Example 9 has been revised to reflect the reduced producer rebate cap of $350,000, in line with the Treasury Laws Amendment (2017 Measures No. 4) Act 2017.

Overall, the practice statement now aligns with the latest law changes while keeping the same core guidance about when refunds can be held back.

GST on Supplies of Sunscreen

The ATO has issued a GST determination that explains when a supply of sunscreen is GST-free.

In general, a sunscreen product will be GST-free if all of the following apply:

• it is a sunscreen preparation for use on the skin (dermal application)
• it has a sun protection factor (SPF) of 15 or more
• it is required to be included in the Australian Register of Therapeutic Goods under the Therapeutic Goods Act 1989
• it is marketed mainly as a sunscreen.

The determination also looks at products that have extra features, for example, a moisturiser with SPF or a tinted sunscreen. The ATO provides guidance to help work out whether these kinds of products are still marketed principally as sunscreen, and therefore can be treated as GST-free.

Electricity Costs for Plug-in Hybrid Electric Vehicles

The ATO has updated PCG 2024/2, which sets out a standard rate for working out electricity costs when charging an electric vehicle at home.

The updated version now:

• includes a new 7-step methodology to calculate home charging electricity costs for plug-in hybrid electric vehicles (PHEVs)
• provides worked examples to show how the method can be applied.

Previously, the PCG only covered fully electric vehicles and there was no specific ATO guidance on how to calculate home charging expenses for PHEVs.

When someone uses the method in the PCG:

• the ATO will accept their calculation of electricity costs for FBT or income tax purposes, as long as
• the ATO’s methodology has been applied correctly.
• Any ATO review will focus on whether the method was followed, rather than how the cost was calculated from scratch.

Start dates for the new method:

• from 1 April 2024 for FBT purposes
• from 1 July 2024 for income tax purposes.

The PCG also allows a transitional approach if odometer records were not kept. For the 2024–25 year, a reasonable estimate of kilometres travelled can be used, based on things like:

• service records
• logbooks
• other available information.

Cases

Whether Rights Conferred on an Electricity Operator were ‘Taxable Australian Real property’

The Federal Court has found that certain rights held by ElectraNet Pty Ltd (ElectraNet) were not ‘real property situated in Australia’ for section 855-20(a). This affected whether shares in the company were classified as taxable Australian property (TAP).

ElectraNet operated South Australia’s electricity transmission network. YTL, a non-resident company, held a 33.5% interest and sold its shares in 2022, making a capital gain of around $948 million. The ATO tried to tax this gain on the basis that YTL’s shares were TAP under section 855-1, arguing that ElectraNet’s rights under its long-term Transmission Network Lease were interests in ‘real property situated in Australia’.

The Court held that in section 855-20, ‘real property’ refers to the legal estate or interest, not the physical characteristics of the asset. The key issue was whether ElectraNet’s rights as lessee under the Transmission Network Lease amounted to real property or a lease of land.

The Federal Court:

• confirmed that ‘real property’ in this context carries its technical legal meaning
• considered how the lease structure interacted with South Australian legislation, which treats electricity transmission infrastructure as personal property, even when it is physically attached to land
• examined several categories of land and interests and found that:
  • on land not owned by ElectraNet or TLC, the statutory easements did not give ElectraNet exclusive possession, so they did not amount to proprietary interests in real property
  • on TLC-owned land, State legislation severed the transmission infrastructure from the land, classifying it as personal property despite the lease arrangement.

Because ElectraNet’s rights under the Transmission Network Lease did not amount to ‘real property situated in Australia’, YTL’s shareholding was not taxable Australian property, and the capital gain was not assessable in Australia.

Division 293 Liability on Lump Sum of Work in Earlier Years

The AAT has found in favour of the Commissioner, holding that a lump sum was assessable in the year it was received for Division 293 purposes, even though it related to work done in earlier years.

Key facts:

• The taxpayer, Mr Uddin, received a lump sum of $106,646 in the 2022–23 income year.
• The payment was made to settle a dispute with his employer and covered:
  • work performed from FY2015 to FY2020, and
  • related superannuation contributions.
• In May 2024, the ATO issued a Division 293 assessment for additional tax on concessional contributions of $4,516.50 for the 2022–23 income year.

The taxpayer’s argument:

• He objected to the assessment, arguing the amount was not derived in 2022–23, because it related to personal services provided in earlier income years (2015 to 2020).

The Tribunal’s decision:

• The AAT held that the entire lump sum was part of the taxpayer’s income for 2022–23, as that is when he received it.
• The Tribunal also found it did not have discretion under Division 293 to:
  • reallocate the amount to earlier years
  • reduce, remove or disregard any part of the amount
  • apply “special circumstances” to change the timing of the assessment.

So, for Division 293 purposes, the full lump sum is counted in the year of receipt, not the years in which the work was performed.

Legislation

Payday Super

The following two Bills, which contain the payday super reforms, received Royal Assent on 6 November 2025 and are now law:

• Treasury Laws Amendment (Payday Superannuation) Bill 2025
• Superannuation Guarantee Charge Amendment Bill 2025

From 1 July 2026:

• employers will be required to pay Superannuation Guarantee (SG) contributions within seven business days of each relevant payday
• this replaces the current quarterly SG payment model.

The Bills amend the Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992 to implement the payday super reforms, and make related amendments to other tax and superannuation legislation.

The new rules commence on 1 July 2026.

If you have any questions regarding the above information, please do not hesitate to contact our office to speak to one of our team.