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Three recent Administrative Review Tribunal (ART) decisions on claims for car expenses have shone a light on what the law requires in relation to car logbooks.

Where you use your car for business purposes, there are two ways of making a claim – the cents per kilometre method for up to 5,000 business kilometres, or the logbook method based on the business percentage of your actual expenditure.

The logbook method will generally result in a bigger deduction where your business use of the car is high and the actual car expenditure plus depreciation is significant. Bear in mind that travelling between home and work is not generally deductible.

To work out your business percentage, you can’t just make an estimate. You need to maintain a logbook for a representative period of 12 weeks. Unless your work or personal circumstances change, the resulting business percentage can then continue to be applied for five years.

For each car journey made for business purposes during the 12-week period the logbook has to record:

• The day the journey began and the day it ended
• The car’s odometer readings at the start and the end of the journey
• The number of kilometres the car travelled on the journey
• Why the journey was made

To calculate your deduction, you use the car’s odometer readings at the start and end of the 12-week test period to work out the total number of kilometres travelled during the period and apply the total business kilometres recorded in the logbook to arrive at the business percentage.

Importantly, and this is something that is sometimes overlooked, the law requires that the record in the car logbook is made “at the end of the journey or as soon as possible afterwards”. And this is where some taxpayers come to grief.

People are busy, and promise themselves they’ll do it later, but the longer they wait the more likely they are to make mistakes. It’s actually quite difficult to accurately recall various trips you think you must have made weeks ago, and the Tax Office can usually spot the difference between a genuine logbook that has been more or less contemporaneously completed and one that has been stitched together well after the event.

While recording all your car use every day for a twelve-week period may seem burdensome, once you’ve done it you’re generally good for another 248 weeks, which isn’t a bad trade-off. You also have some flexibility about which 12-week period you use.

The three taxpayers involved in the three ART decisions referred to above were seen by the Tax Office and the Tribunal as not having made contemporaneous logbook entries, having logbook odometer readings that were inconsistent with service records, having several versions of the logbook for the same test period and in one case being a complete fabrication.

In each of the three cases there were other reasons why their claims for car expenses failed, but the Tax Office will have noted the Tribunal decisions and must be more likely in future to critically examine logbooks supporting large car expense claims to ensure they comply with the law.

It’s never too late to fix these things, so if you have any doubts about the reliability of the logbook you are using to make your motor vehicle claim, come in and see us and we’ll see if we can sort things out. $

During the COVID pandemic years, we all suffered in one way or another – in particular the small businesses who relied on customers coming through their doors.

Mr Lewis was one such small businessman who operated a “multi-gym business” and who as result of the COVID pandemic found it impossible to keep his business operating and pay staff without additional financing. In his own words:

“…the government imposed lockdowns shut down my business operations virtually overnight. I had no income, no relief fast enough to respond, and no option but to sell personal assets just to meet my basic obligations — to pay rent, staff, escalating legal costs and debts.”

So that is exactly what he did.

He arranged for the family trust of which he was a beneficiary to sell shares and to distribute the gain to him. (Luckily, the trust had made some good investments.) As a result, a $200,000 capital gain was distributed to him which he used to keep his business going and to pay staff, etc.

The problem was he was clearly assessable on that capital gain – and he sought to challenge the decision by arguing he was forced to sell the shares and that he did not really make a gain because he had to use the money to save his business.

In short, Mr. Lewis argued the Tribunal should consider his intention and his hardship, claiming the gain was not a true “profit” since proceeds offset business losses from lockdowns.

However, the Tribunal had to conclude that he had realised the capital gain and that there was no discretion in the law to exclude it or exempt it.

Furthermore, there were no CGT concessions available – and, in particular, the 50% discount was not available as the shares were not held by the trust for more than 12 months.

The moral of this story is that where a capital gain has duly been realised or come home to the taxpayer there is no discretion for the amount to be excluded from the assessment process (unless the tax law specifically provides one: eg, a roll-over).

This is the case, despite the circumstances under which gain arose – including where the taxpayer was “forced” to sell an asset or the gain “accidentally” arose. The only exception is where there has been a compulsory acquisition of an asset under relevant legislation.

Otherwise, a taxpayer can only seek relief after the assessment process by making a hardship relief application – and even then it is very difficult to succeed, especially if there were any reasonable measures a person could have taken to avoid the hardship.

If you find yourself in such circumstances, come and speak to us about the matter – and preferably before you think you may be “forced” to sell some CGT assets.

From 1 July 2026, the amount you can contribute to super will increase, creating new opportunities to boost your retirement savings.

The annual concessional contribution cap will rise from $30,000 to $32,500. These are contributions made from pre-tax money, such as employer contributions, salary sacrifice and personal deductible contributions.

Non-concessional contributions

The annual non-concessional contribution (NCC) cap will also increase from $120,000 to $130,000. These are contributions made from your after-tax money.

For people who are eligible to use the bring-forward rule, the higher caps will allow even larger contributions. From 1 July 2026, the three-year bring-forward cap will increase from $360,000 to $390,000.

Whether you can use these higher NCC caps will depend on your total super balance (TSB) at 30 June 2026. Your TSB is the total amount you have across all of your super accounts at that date, including money in accumulation and pension phase.

The table below highlights how the TSB thresholds and NCC caps will change from 2025–26 to 2026–27.

One important trap to watch is that if you have already triggered a bring-forward period before 1 July 2026, you do not get access to the new higher caps for that existing period. For example, if you triggered a three-year bring-forward in 2025–26, you remain limited to the current maximum of $360,000 across that three-year period, being until 1 July 2028. You do not get to use the new $390,000 cap.

Concessional contributions

The higher concessional cap may also create extra opportunities through catch-up concessional contributions. If your TSB is less than $500,000 at 30 June of the previous year, you may be able to use unused concessional cap amounts from the previous five years. In some cases, this could allow a very large deductible contribution to be made.

This means the lead-up to 30 June 2026 could be an important planning window. In some cases, it may make sense to delay a contribution until the new financial year to access the higher caps. In others, if you have already met a condition of release, taking a small amount out of super before 30 June may help keep your balance below a key threshold and preserve access to valuable contribution strategies.

The key message is that the higher caps could create valuable opportunities, but the rules around timing and TSB are also important. Now is a good time to check how these changes may apply to you. $

Granny flats are becoming more of a common feature of the urban environment. No doubt this is due to the ongoing and unremitting nature of the housing affordability crisis, and the relaxing of regulations about where and how they can be built. And they do seem to offer a very viable solution to the problem – at least in the short term.

However, if you are thinking of constructing one, or already have one in place, you need to be aware of all the tax implications – and they can be very significant.

Firstly, if you rent it at commercial or arm’s length rates, then not only will you be assessable on the rent (albeit being able to claim a portion of the deductions), but you will lose a part of the capital gains tax (CGT) exemption on your home. This is because you are using your home to produce income.

But in most cases, this partial CGT liability should be taxed concessionally by giving you a market value cost (at the time you first rent it) from which to calculate the gain (or loss).

Furthermore, the CGT 50% discount (or whatever is in place after the May Budget) should, in most cases, be available to reduce the amount of your assessable income.

However, where you do not rent your granny flat at commercial rates (including where the occupants may only pay their share of outgoings, such as electricity and rates) then you will not lose any CGT exemption on the home.

This will typically be the case where your granny flat is occupied by a relative, such as an adult child – or by a granny (and/or granddad), themselves!

It should also be noted that it is becoming common for the owner of the home (young adult children) to come to some sort of agreement with a parent or parents, whereby the parent/s agree to pay the price for building the granny flat in exchange for the “right to occupy” for a number of years. Likewise, such agreements may bring to an end a right to occupy.

The making of an agreement whereby “granny-flat” rights are created in another party (or bought to an end) can technically have immediate CGT consequences – despite the fact that it is made in relation to the CGT-exempt home and among family members.

However, the CGT rules provide that this will not be the case where the person acquiring the granny flat right has reached pensionable age (or has a relevant disability) and the arrangement is in writing and is not of a “commercial” nature.

These and other granny flat arrangements require good professional advice – particularly in terms of determining if such an agreement is “commercial”.

So, if you currently own a granny flat or you are thinking of constructing one for any purpose, it is important to come and speak to us – especially in terms of preserving the CGT exemption on your home (or at least maximising it).

There’s been a lot of talk about changes to super, and one of the biggest updates is now official.

The government has passed the Division 296 tax, which will start from 1 July 2026. While it mainly affects people with large super balances, it’s still important to understand what’s changing and why.

A quick recap

When this tax was first proposed back in 2023, it caused quite a stir.

The original plan included:

• » Taxing unrealised gains (basically, increases in value on paper that you haven’t actually received yet)
• » A $3 million threshold that wasn’t going to increase over time

Understandably, many people were concerned this wasn’t fair.

After strong feedback, the government has revised the rules. The final legislated version aligns more closely with how tax usually works, that being, taxation of actual income not paper gains.

What’s changed in the final version?

Here’s what the new rules look like now:

• » You’ll only pay tax on actual earnings, not paper gains
• » Your super fund calculates your earnings and reports them to the ATO
• » The $3 million threshold will increase over time with inflation
• » A new $10 million threshold has been added
• » The rules start from 1 July 2026, giving people limited time to prepare
• » Defined benefit pensions are included, so all types of super funds are treated the same

How does the tax work?

Think of it like a tiered system:

• » Up to $3 million – earnings are taxed as normal (up to 15%)
• » $3 million to $10 million – a portion of earnings are taxed up to 30%
• » Above $10 million – a portion of earnings are earnings taxed up to 40%

Importantly, if your balance is only slightly above $3 million, only a small share of your earnings will be subject to the higher tax rate.

Put simply, the more you have in super above these thresholds, the higher the tax applied to that portion of your earnings.

Who does it apply to?

This tax only applies to individuals with more than $3 million in super or pension phase.

A few key things to know:

• » The threshold applies per person, not per fund
• » That means a couple could have up to $6 million combined and not be affected
• » Even if an SMSF has more than $3 million, you won’t be impacted unless your personal share exceeds the $3 million threshold

The first time this will apply is based on your balance at 30 June 2027.

How do you pay it?

You don’t need to calculate the tax yourself.

Here’s how it works:

1. Your super fund reports your balance and earnings to the ATO
2. The ATO works out if you owe extra tax
3. You’ll receive a notice if you’re affected

If you do have a tax bill, you can choose to:

• » Pay it from your own money, or
• » Have it released from your super fund

What does this mean for you?

For most people, this change won’t apply at all.

But if you have a high super balance, it could mean:

• » Paying more tax on part of your super earnings
• » Rethinking how your super is structured over time

The new rules start from 1 July 2026, with the first tax assessments expected in 2027–28.

Don’t rush into decisions

If you think this might affect you, it’s important not to act too quickly.

Taking money out of super might seem like a solution, but:

• » It can be difficult to put it back in due to contribution limits
• » You could lose long-term tax advantages

Getting the right advice before making any changes is key.

Final word

While Division 296 tax is a big change, it’s targeted at people with large super balances and has been refined to be fairer than originally proposed.

If you’re unsure how it affects you, we’re here to help you understand the new rules and what they could mean for your situation.

With the due date for FBT returns coming up, the following non-exhaustive checklist may prove useful in determining whether you as an employer have an FBT liability.

Although it will generally fall to your accountant to prepare the FBT return from your software file or other records, all of the instances where you have provided employees and/or their associates (eg, spouse) with a potential fringe benefit may not always be apparent to them. To assist you in bringing these potential benefits to the attention of your accountant, following is a general checklist to refer to.

FBT Checklist 2025-26

With the due date for FBT returns coming up, the following non-exhaustive checklist may prove useful in determining whether you as an employer have an FBT liability.

Although it will generally fall to your accountant to prepare the FBT return from your software file or other records, all of the instances where you have provided employees and/or their associates (eg, spouse) with a potential fringe benefit may not always be apparent to them. To assist you in bringing these potential benefits to the attention of your accountant, following is a general checklist to refer to.

CAR FRINGE BENEFITS

CAR PARKING FRINGE BENEFITS

LOAN FRINGE BENEFITS

DEBT WAIVER FRINGE BENEFITS

EXPENSE PAYMENT FRINGE BENEFITS

BOARD FRINGE BENEFITS

LIVING-AWAY-FROM-HOME ALLOWANCE (LAFHA)

MEAL ENTERTAINMENT FRINGE BENEFITS

HOUSING FRINGE BENEFITS

ENTERTAINMENT LEASING FACILITY EXPENSES

TAX-EXEMPT BODY ENTERTAINMENT FRINGE BENEFITS

PROPERTY FRINGE BENEFITS

RESIDUAL FRINGE BENEFITS

FBT REBATE

The Commonwealth Seniors Health Card (CSHC) can be valuable for many self-funded retirees, helping reduce out-of-pocket health costs (for example, cheaper PBS medicines and other concessions). But it’s income tested, and an upcoming rise in deeming rates may affect some people’s eligibility.

CSHC income cut-off thresholds

To qualify, you must meet the CSHC income test – there is no assets test. Centrelink assesses your (and your partner’s) adjusted taxable income and this may also include deemed income from any account-based pensions (ABPs) you have.

The current CSHC income limits are:

• $101,105 p.a. if you’re single

• $161,768 p.a. for couples (combined)

• $202,210 p.a. for couples separated by illness/respite care/prison.

What are deeming rates?

Deeming is the Government’s method of assuming a set rate of return on financial assets, rather than using your actual earnings. It’s designed to keep the rules simple and treat people consistently, regardless of how their money is invested.

Deeming commonly applies to assets such as:

• bank accounts and term deposits

• shares and managed funds.

For CSHC purposes, deeming is relevant if you have an ABP as these products are generally deemed and counted under the income test.

Deeming rates are increasing from 20 March 2026

The Government is increasing the deeming rates. From 20 March 2026, the new deeming rates will be:

• 1.25% (lower rate) for financial assets up to $64,200 (singles) and $106,200 (couples combined)

• 3.25% (upper rate) for financial assets above those thresholds.

How this could affect your CSHC

If you’re close to the CSHC income limit, higher deeming rates can increase your assessed income even if your actual investment earnings don’t change. That may mean you:

• lose eligibility for the CSHC, or

• don’t qualify when you otherwise expected to.

This risk is greatest for self-funded retirees who have significant taxable income in addition to their ABP where deeming applies.

What to do next

If you’re near the thresholds, it’s worth reviewing your adjusted taxable income plus any deemed income using the new deeming rates.

If you’re unsure how this impacts you, consider seeking advice. A quick calculation can often show whether you’re comfortably under the limit or sitting in the “at risk” zone as the new rates begin. G

From 1 July 2026, employers must pay their employees’ superannuation guarantee (SG) contributions at the same time as salary or wages. This new system is known as payday super.

Currently, most employers pay super on a quarterly basis. From July 2026, super will instead need to be paid each pay cycle.

The ATO has released a checklist to help employers prepare for this change. Below is a straightforward guide outlining what small businesses should be doing now to get ready.

If you’re an employee, this article explains what your employer will need to do on your behalf from 1 July 2026. The aim of these changes is to ensure super is paid more frequently and reaches your super fund sooner.

NOW: UNDERSTAND THE NEW REQUIREMENTS

• From 1 July 2026, SG contributions must be paid on every payday

• SG contributions must generally reach employees’ super funds within 7 business days after payday

• Super will be calculated using a new concept called “qualifying earnings”, so it is important to understand what this covers. In simple terms, qualifying earnings include an employee’s ordinary time earnings (OTE) – that is, payments for ordinary hours of work, as well as certain types of paid leave, allowances, bonuses and lump sum payments. Qualifying earnings also include commissions, salary sacrificed amounts to super, and payments made to workers captured under the expanded definition of employee, such as independent contractors who are paid mainly for their labour

• Employers will need to report OTE/qualifying earnings and superannuation liabilities via single touch payroll (STP) software

FEBRUARY TO MARCH 2026: PLAN AND PREPARE

• Decide how your business will move from quarterly payments to payday payments

• Speak to us as your trusted accountant or payroll provider if unsure about how to transition to payday super

• Review how paying super more often will affect your cash flow and update your cash-flow forecasting and budgeting processes accordingly (we can help with this)

• Make sure all employee super fund details are correct and confirm member account numbers and unique superannuation identifiers are up to date to prevent any errors

• Fix any warning messages you receive from your employees’ super funds as incorrect details may cause payments to be rejected after 1 July 2026 causing a late payment

APRIL TO JUNE 2026: LOCK IN YOUR PLANS

• Confirm your payroll software will be ready for payday super

• If using a clearing house, check it can support payday super and whether updates are required

• If currently using the ATO Small Business Superannuation Clearing House (SBSCH), transition to an alternative clearing house provider before 1 July 2026, as the SBSCH will cease operating from that date

• Download and retain all SBSCH transaction history before 1 July 2026. Once the service permanently closes, records will no longer be accessible. These records may be required in the future to respond to ATO reviews, audits or employee enquiries

• Put a process in place to quickly fix any SG contributions payment errors

• Allow enough time for SG contributions to clear so the super fund receives the contribution within 7 business days after payday

• Keep clear records of all super payments

• Pay SG contributions for the January – March 2026 quarter by 28 April 2026

1 JULY 2026: PAYDAY SUPER STARTS

From 1 July 2026, payday super takes effect. To meet the new requirements, employers must:

• Pay SG contributions in full, on time and to the correct super fund. Failure to do so may result in penalties, including the superannuation guarantee charge (SGC), which can exceed the original super amount owed

• Ensure SG contributions are received by and allocated to employees’ super funds within 7 business days of each payday

• Calculate SG contributions based on qualifying earnings

• Report qualifying earnings and SG liabilities via STP-enabled software

• Pay the final quarterly SG contribution for the April – June 2026 quarter by 28 July 2026

• Note that the SBSCH cannot be used for any payments made on or after 1 July 2026, and no late payment offset will apply for that final quarter.

FINAL REMINDER

Start preparing early by checking that payroll software is ready, reviewing cash flow and confirming employee super details are correct. Payday super is a significant change, but with proper planning the transition can be smooth. If you are uncertain about how the new rules will affect your cash flow or payroll processes, please contact us – we are here to help ensure everything is in place before the July 2026 start date.

Superannuation rules are always evolving, and 2026 is shaping up to be another year of important changes. Some of these updates may only affect a small group of people, while others could impact almost everyone with super.

Whether retirement feels a lifetime away or it’s already on the horizon, understanding what’s changing can help you make smarter decisions and avoid costly mistakes. Here are six key changes to keep on your radar.

1. Possible tax changes for large super balances

One of the most talked-about changes is the government’s proposal to increase tax on large super balances, also known as Division 296 tax.

Here’s how it’s expected to work (if the legislation passes):

• Balances up to $3 million: no change. Earnings continue to be taxed at 15% as they are now.

• Balances between $3 million and $10 million: an extra 15% tax on earnings, bringing the total to 30% on that portion.

• Balances above $10 million: the total tax rate on earnings will rise as high as 40%.

It’s important to note:

• These changes are not law yet

• Only a small number of Australians would be affected

• Withdrawing super prematurely can be hard to undo because of contribution limits

If this may apply to you, the best approach is patience. Wait until the rules are final and get professional advice before making any big moves.

2. Payday super is locked in

One change that is definitely happening is payday super.

Currently, employers only have to pay super at least once every three months. From 1 July 2026, that changes.

Under the new rules:

• Employers must pay super at the same time as salary or wages

• Contributions must reach your super fund within 7 business days of payday

• For new employees, the first contribution must be paid within 20 business days of the salary or wages being paid

This is good news for workers. Paying super more frequently means:

• Your money gets invested sooner

• Less chance of unpaid or forgotten super

• Better long-term outcomes thanks to compounding

If you’re an employer, now is the time to start preparing for these changes ahead of their commencement on 1 July 2026. Reviewing your payroll systems and internal processes early will help ensure a smooth transition. This may involve speaking with your payroll software provider, accountant, or registered tax professional to confirm your systems are compliant. If you need support, we’re here to guide you through the process and help you get ready with confidence.

3. Contribution caps are expected to increase

Thanks to rising wages, super contribution limits are expected to increase from 1 July 2026.

While final confirmation depends on official figures released in late February 2026, the changes are widely expected to be:

• Concessional (before-tax) cap increasing to $32,500

• Non-concessional (after-tax) cap increasing to $130,000

These caps are linked to wage growth, and based on recent data, it would take a significant and unlikely drop in wages for indexation not to occur.

This change could create opportunities for:

• People topping up their super

• Those who arrange with their employer to salary sacrifice part of their income into super

• Individuals planning larger after-tax contributions

Once the new caps are confirmed, we’ll let you know and help you understand what they mean for your super strategy.

4. Transfer balance cap: what’s happening next?

The transfer balance cap (TBC) limits how much super you can move into a retirement-phase pension. Unlike contribution caps, the TBC is indexed to inflation (CPI) rather than wages.

Based on the latest December CPI figures, the TBC is set to increase from $2 million to $2.1 million from 1 July 2026.

This change will mainly affect people who haven’t yet started a retirement pension. If you already receive a retirement pension from your super, you may still benefit from a partial increase, depending on your individual circumstances and how much of your cap you’ve already used.

5. More flexibility for legacy pensions

Good news for people stuck in older super pension products.

New rules now allow greater flexibility for certain legacy pensions, such as lifetime, life expectancy and market-linked pensions held in SMSFs.

Previously, these pensions:

• Couldn’t be easily changed or exited

• Often no longer suited members’ needs

• Had strict limits around reserves and conversions

Under the new rules:

• A five-year window allows eligible members to review and restructure these pensions

• This creates opportunities to simplify super and improve flexibility

Because legacy pensions are complex, professional advice, especially from an SMSF specialist, is strongly recommended before making changes.

6. Better fund performance, transparency and tech

Large APRA-regulated super funds continue to face increased scrutiny, and that’s a win for members.

In 2026, expect to see:

• Ongoing pressure on underperforming funds, including forced mergers

• Clearer reporting on fees, performance and investments

• Better tools to compare super funds and make informed choices

At the same time, technology is transforming how we interact with super. Many funds are rolling out:

• Smarter online dashboards

• Improved mobile apps

• AI-driven tools to help with investment choices and retirement planning

If you haven’t logged into your super account lately, 2026 is a good year to start.

Final thoughts

Superannuation is a long-term game, and even small rule changes can have a big impact over time.

Take the time to review your super, stay informed about potential changes, and consider speaking to a financial adviser if needed. With the right knowledge and strategy, you can make sure your super keeps working hard for your retirement.