June brings a mix of proposed tax changes, ATO updates and recent court decisions that could affect individuals, employers, business owners, property investors and families using trusts.
This month’s summary looks at the key 2026–27 Federal Budget proposals, including possible changes to work-related deductions, personal tax offsets, negative gearing, capital gains tax, small business deductions, electric vehicle tax concessions and family trust arrangements.
We also cover ATO updates on contractor super, rental property claims, work-related car expenses, meal expense claims, and arrangements where income from one person’s work is split through a company or trust.
Some of these updates are still proposals, while others are already part of the ATO’s current focus. They are worth understanding early, especially where they may affect your business structure, payroll, super obligations, tax claims, property plans, trust distributions or record keeping.
As change occurs, we’ll keep you posted through Fortis Accounting Partners’ social media accounts.
From the Government
Federal Budget 2026–27
The 2026–27 Federal Budget included several proposed tax changes that may affect individuals, businesses, property investors and family groups.
Some of the key proposals include:
• A proposed $1,000 instant deduction for work-related expenses
• A new $250 Working Australians Tax Offset
• Changes to negative gearing for some residential investment properties
• Changes to the capital gains tax discount
• A permanent $20,000 instant asset write-off for eligible small businesses
• Proposed changes to how some discretionary trust income may be taxed
• Changes to the FBT treatment of eligible electric vehicles
Some of these measures are now before Parliament, but they are not yet final.
This means the details may still change. It is important to seek advice before making major decisions based on the announcements.
Electric Vehicle FBT Changes
The Government has announced that the current FBT exemption for eligible electric vehicles will be reduced over time.
The full exemption is expected to continue until the end of March 2027.
From 1 April 2027 to 1 April 2029, eligible electric vehicles costing $75,000 or less are expected to keep the full exemption. Eligible electric vehicles costing more than $75,000 but below the luxury car tax threshold are expected to receive a 25% FBT discount.
From 1 April 2029, all eligible electric vehicles below the luxury car tax threshold are expected to receive a 25% FBT discount.
If your business provides company cars, novated leases or salary packaged vehicles, it may be worth reviewing the timing and cost of future electric vehicle arrangements.
Superannuation Performance Test
The Government is consulting on changes to the annual superannuation performance test.
This test is designed to measure how super funds perform for their members.
The proposed changes look at how fund performance is measured, including investment benchmarks, risk and whether the test should apply to more super products.
For most individuals, this is something to be aware of rather than act on immediately.
From the Regulators
ATO Focus On Personal Services Income
The ATO is focusing on arrangements where income from one person’s work is split with others or kept inside a company or trust.
This may affect professionals, consultants and contractors who operate through a company or trust structure.
The ATO is concerned about arrangements where income is moved away from the person who actually performed the work.
If you operate through a structure and most of the income comes from your personal skills or effort, it may be worth reviewing your setup.
The ATO has indicated that businesses making a genuine effort to address higher-risk arrangements by 30 June 2027 may have this taken into account during compliance activity.
Foreign Persons Buying Property In Australia
The ban on foreign persons buying established residential dwellings in Australia has been extended to 30 June 2029.
Foreign persons can include temporary residents, some non-resident New Zealand citizens, and people who are not Australian citizens or permanent residents.
Limited exceptions continue to apply, including some investments that increase housing supply.
If you are a foreign buyer, or you are assisting a foreign buyer with an Australian property purchase, it is important to check the rules before signing a contract.
Faster Super Payments For SMSFs
The ATO is reminding self-managed super funds to prepare for Payday Super.
From 1 July 2026, employers will generally need to pay super at the same time as wages, with contributions reaching the employee’s super fund within 7 business days of payday.
SMSFs receiving contributions from unrelated employers will need to be able to accept faster payments through the New Payments Platform.
SMSF trustees should check whether their fund bank account can receive these payments and how contributions will be identified and recorded.
Payday Super For Contractors
The ATO has confirmed that Payday Super will also apply to contractors where super is already required to be paid for them.
The rules that decide whether a contractor is entitled to super are not changing.
A contractor may still be treated as an employee for super purposes if they are mainly paid for their labour, skills or personal effort. This can apply even if the contractor has an ABN or sends invoices.
From 1 July 2026, where super is payable for a contractor, contributions will generally need to reach the super fund within 7 business days of payday.
For contractors paid by invoice, payday will usually be the date the invoice is paid.
Businesses should review contractor arrangements now so payroll systems are ready before Payday Super begins.
Zone Or Overseas Forces Tax Offset Calculator
The ATO has updated its zone or overseas forces tax offset calculator.
The updated tool includes automatic location recognition and simpler income inputs for taxpayers with dependants.
This may be relevant for taxpayers living in eligible remote areas or those who may qualify for the overseas forces tax offset.
Rulings, Determinations & Guidance
Rental Property Income And Deductions
The ATO has released updated guidance for individuals who earn rental income.
The guidance applies to long-term rentals, short-term accommodation, holiday homes and room-sharing arrangements.
The ATO explains when rental income needs to be declared, when expenses may be claimed, and how deductions should be split where a property is used for both private and rental purposes.
Holiday homes are a key area of focus.
In some cases, certain costs may not be deductible even if the property earns some rental income during the year.
Rental property owners should keep clear records showing when the property was rented, when it was used privately, when it was available for rent, and how any deductions were calculated.
Meal Expenses And Reasonable Rates
The ATO has commented on a recent case involving meal expense deductions for a long-haul truck driver.
The ATO has made it clear that using the reasonable rates does not automatically mean a deduction can be claimed.
You still need to show that the expense was actually incurred and connected to earning income.
Useful records may include bank statements, rosters, travel records, work diaries or other documents that support the claim.
Genuine Redundancy Payments
The ATO has released guidance following a recent case about whether a payment qualified as a genuine redundancy payment.
The case involved an employee who was offered alternative roles after a restructure, but the new roles had reduced hours, different working days and lower pay.
The ATO accepts that a significant reduction in hours and pay can be relevant, but each case depends on the facts.
Employers should keep clear records of restructures, role changes, duties, hours and pay when making redundancy decisions.
Payday Super And Exceptional Circumstances
The ATO has released draft guidance on when extra time may be available under Payday Super.
This may apply where events outside an employer’s control affect their ability to make super contributions on time.
Examples include natural disasters and widespread system outages.
This is not intended to operate as a general extension for cash flow or administration issues.
New Cents Per Kilometre Rate
The ATO has proposed a new cents per kilometre rate for work-related car expenses.
From 1 July 2026, the proposed rate is 91 cents per kilometre.
If you use this method, you should still keep records showing how you calculated your work-related kilometres.
Out-Of-Cycle Payments Under Payday Super
The ATO has released draft guidance on some payments made outside the normal pay cycle.
This may include payments such as:
• Allowances
• Bonuses
• Commissions
• Loadings
• Advance payments
• Back payments
In some cases, employers may have until 7 business days after the employee’s next regular payday to make the related super contribution.
Termination payments will generally remain subject to the standard timing rules where there is no later payday for that employee.
Cases
Company Constitution Not Enough For Division 7A Loan Agreement
A recent Tribunal decision looked at whether a company constitution could be used as a complying Division 7A loan agreement.
The taxpayer had received a loan from a private company but did not have a separate written loan agreement.
The taxpayer tried to rely on loan terms contained in the company constitution.
The Tribunal found this was not enough.
Private company loans to shareholders or associates should be supported by a proper written loan agreement.
Poor documentation can lead to deemed dividends and unexpected tax outcomes.
Family Trust Election Records
A Federal Court case has highlighted the importance of keeping clear records for family trust elections.
In this case, an old trust tax return suggested that a family trust election had been made.
The taxpayers later argued that no election had been made, but the Court found they could not prove this.
The issue became important because the trust later made distributions outside the relevant family group, which triggered extra tax.
Trustees should review historical records, past tax returns and ATO records before making trust distributions, especially where payments may be made outside the family group.
Legislation
Tax Reform Bills Introduced
The Government has introduced legislation covering several Federal Budget measures.
The proposed legislation includes details on:
• Changes to capital gains tax
• Changes to negative gearing
• The Working Australians Tax Offset
• The $1,000 standard deduction for work-related expenses
• Related changes to depreciation and FBT rules
These Bills still need to pass through Parliament before becoming law.
Taxpayers should avoid making major decisions based only on announcements until the final rules are confirmed.
Business Registers And Director ID Changes
The Government has also introduced legislation to improve business registers and strengthen the Director ID system.
The proposed changes are designed to link Director IDs to ASIC’s Companies Register and support enforcement against unlawful activity, including illegal phoenix behaviour.
Company directors should make sure their Director ID obligations are up to date and that company details on official registers remain accurate.
If you have any questions regarding the above information, please do not hesitate to contact our office to speak to one of our team.
