Blog

Around 11,000 Australians invested about $1.1 billion of their retirement savings in the Shield and First Guardian Master Funds. These two managed investment schemes collapsed, costing investors their savings.

Some investors have been compensated by their platform provider. However, many have not.

The Government recently set out several changes to super to help protect members’ retirement savings. Let’s look at some of the proposed changes.

Watch for a cap on advice fees taken from your super

Your super fund cannot deduct personal advice fees from your account without your written consent.

However, the law does not limit how much can be deducted where there is written consent.

APRA-regulated fund trustees would have to set caps on how much may be deducted and keep watch that these caps are not breached.

The Government is particularly concerned about people with small super balances paying fees that substantially erode their savings.

Expect much larger penalties for trustees of APRA-regulated super funds

The Government does not believe the current penalty level is large enough to deter APRA-regulated funds from breaches.

The maximum civil penalty for core breaches of an APRA-regulated fund trustee’s obligations would rise from 2,400 penalty units to 50,000 penalty units.

From 1 July 2026, a penalty unit is $364. On that basis in dollar terms the maximum penalty would rise from about $873,600 to about $18.2 million.

ASIC to get more powers

ASIC would also be able to direct an APRA-regulated fund trustee to compensate members if an investment option fails and the trustee has not met its obligations.

This would be a faster and easier option for investors compared to complaining to AFCA.

Know what is changing for SMSFs

Several changes are proposed if you have an SMSF or are thinking about setting one up.

• The ATO would be able to block rollovers into a new SMSF while it investigates fraud, financial abuse or misconduct, or where it suspects potential harm. The ATO can already stop rollovers in practice by withholding new SMSFs’ details from Super Fund Lookup. This new power would allow the ATO to stop rollovers even after the fund is registered and listed.
• Trustees would have to complete trustee education before registration. At present it is only necessary to sign a declaration confirming you understand your duties. There is no obligation to do any prior learning about your obligations as a trustee.
• Your fund would need a uniquely identifiable bank account. Treasury has not said what that would require in practice.
• New funds would need a written investment strategy from the start. The current rule is that SMSFs must have an investment strategy that is reviewed regularly. The changes would require the investment strategy to be in writing and in place from the start of the fund.
• The ATO would collect more information about advisers and others involved in setting up your SMSF, and about ongoing advice fee deductions.
• The supervisory levy would rise from $259 to $295, and new funds would pay their first levy when they are set up.

Reminder

These measures still need to be legislated, so the detail and the start dates could change.

It has been proposed that people who pay rent or have a mortgage be allowed to divert a quarter of their future super contributions into take-home pay for up to three years. Employers would keep paying the full 12%, but the super fund would pay 3% directly to members who opt in. Reaction to the proposal has been mixed.

However, did you know that it is already possible to access your super on compassionate grounds if you are about to lose your home due to foreclosure?

Accessing super under compassionate grounds to stop a forced sale applies to your home only. Investment properties do not qualify, and neither does rent.

If you are renting and behind on payments, you may be eligible to draw a lump sum from super under severe financial hardship. To qualify you generally need to be unable to pay living expenses, such as rent, and be in continuous receipt of income support payments, such as JobSeeker, for 26 weeks.

Know how much you can take

You can apply for a lump sum of up to three months of mortgage repayments plus 12 months’ interest on the outstanding balance.

If your repayments are $1,200 a month and 12 months’ interest comes to $9,600, the most you can request in a 12-month period is (3 x $1,200) + $9,600 = $13,200.

To qualify you must satisfy the following:

• The property is your principal place of residence.
• You are legally responsible for the mortgage repayments or the council rates.
• You have written advice that the home is to be foreclosed, sold or repossessed, either a default notice from your lender or a council notice that rates have been outstanding for two or more years.
• You have no capacity to pay the amount needed to stop the sale.

Know which debts are covered

There are three debts that are covered under this option to access super:

• Mortgage arrears where the lender has issued a repossession or sale notice.
• Council rates in arrears for two or more years where the council has given written notice it will sell your home.
• A debt to a third party where a court order authorises an enforcement officer to sell your home to pay it.

Necessary paperwork

For mortgage arrears you need the default notice, a utility bill less than three months old in your name showing the property address, and a letter from each lender on its letterhead dated within 30 days of your application.

That letter must state the overdue amount, the amount owing to stop the sale, the property address, three months of repayments, 12 months’ interest, and who is responsible for the loan.

Council rates applications need the utility bill and an equivalent council letter itemising the arrears year by year.

If you cleared the arrears by borrowing elsewhere, you can still apply, but you will need documents showing what was owing at the time.

Reminder

Money taken out of super early can greatly impact your savings at retirement. Keep in mind withdrawals may also be subject to a maximum 22% tax (including Medicare levy).

Don’t forget to speak to your adviser to discuss your options.

If you worked overseas before settling here, you may still have money in a foreign retirement scheme. If the ATO recognises the scheme as a ‘foreign super fund’ you may be able to transfer it into an Australian super fund. Keep in mind the timing affects how much tax you pay.

Transfer within six months

There is generally no tax payable if the foreign super scheme is cashed or transferred to an Australian super fund within six months of becoming an Australian tax resident.

After this time, any growth on your foreign interest since you became a resident is taxed when it is cashed out or transferred into an Australian super fund. This growth is called applicable fund earnings.

Choose who pays the tax on the growth

When a foreign super fund is cashed or transferred into an Australian super fund after six months of becoming a tax resident, you are ordinarily assessed on the applicable fund earnings. However, if it is transferred into an Australian super fund the earnings can instead be included in your super fund’s assessable income. In super it will be taxed at 15% instead of your marginal tax rate.

The choice is only available if you:

• transferred your whole foreign super fund interest to an Australian super fund; and
• no longer hold an interest in that fund.

Watch your contribution caps

The amount transferred into super ordinarily counts towards your non-concessional contribution cap.

However, where you elect to have the applicable fund earnings treated as assessable income of the receiving super fund, any amount covered by that election does not count towards your contribution caps.

Without the election, the applicable fund earnings are assessable to you personally and the full transfer counts towards your non-concessional contribution cap.

If you are age 75 or over your super fund cannot receive the transfer or any member contribution.

Things to remember

There are some things to consider before cashing or transferring your foreign super. These include:

• There may be tax in the other country.
• You will need to confirm the scheme is a foreign super scheme with the ATO. If it is not a foreign super scheme different tax applies.
• The foreign super fund will have its own rules on how and when the super benefits can be taken. For example, UK pensions need to meet His Majesty’s Revenue and Customs (HMRC) requirements.

Every overseas scheme has its own rules. The tax outcome depends on your circumstances. It also depends on the tax rules in the country it is coming from.

It is, therefore, important you speak to an adviser before moving your foreign super.

A recent Federal Court decision once again outlined the importance of determining a person’s residency status for tax purposes – and moreover how difficult that may be. And that it may not just be a matter of having lived overseas for several years.

In that case, the taxpayer lived in Australia for 6 years with his young family before taking up an employment contract with a construction company in Dubai where he worked for 5 years. However, he returned to Australia to visit his family twice a year for periods of up to 5 weeks.

In addition, he only leased an apartment in Dubai – with most of his investments, belongings and personal ties remaining in Australia.

Even though he did not “reside” in Australia (in the ordinary sense of that phrase), the Court nevertheless found that he was a resident of Australia for tax purposes.

This was essentially because under another element of the “tax residency test” he had not established a “permanent place of abode” outside of Australia and because his connections were still strongly with Australia.

In these circumstances, the Court held that he was “a resident of Australia” for tax purposes. Moreover, this meant that he was liable for tax in Australia on the wages he earned from working in Dubai and on any other foreign sourced income – as well as, of course, any income he earned in Australia (eg bank interest).

So, this is the main consequence of being a resident for tax purposes: you are liable for tax in Australia on income earned both in Australia and outside Australia – including capital gains from any property a person may own overseas (eg a rental property, shares).

But you also get some good tax advantages if you are a resident of Australia for tax purposes.

For a start, you are taxed at individual resident tax rates – which are far more generous than those that apply to a foreign resident. You can also access the CGT discount (at least until its general abolition from 1 July 2027) and thereafter the inflation adjusted indexation for any capital gains (whether sourced in Australia or overseas).

On the other hand, if you were a non-resident for tax purposes you could not access these concessions (albeit interestingly, a foreign resident can also use the generous CGT small business concessions if they qualify for them).

So obviously on the flip side, if you are a non-resident you will be taxed at harsher non-resident tax rates and, generally, you won’t be able to access the CGT discount or the new indexation method for taxing capital gains.

But before any of these tax rules are applied, it is vital to determine a person’s residency status for tax purposes.

And this may not be an easy matter. As the above Federal Court case illustrates, even if you “live” overseas for a number of years you still may be considered to be a resident for tax purposes – depending on your exact circumstances.

And then there is the often more difficult issue of when exactly you become a non-resident for tax purposes, or resident (as the case may be) – and the tax rules that apply in that case.

And this includes where you have a young adult child who is heading off to work and travel overseas.

So, if you or a loved one is in this type of scenario or think you will be, it is important to come and speak to us so that we can work things out and discuss the tax consequences with you.

Under the big tax changes announced in the May Budget, and now law, the generous 50% CGT discount will no longer apply from 1 July 2027 and will be replaced by the inflation-based “indexation” (except in limited circumstances).

However, it will still be available for the capital gain on an asset that accrues up to that date.

This will apply where you have acquired an asset before that date and sell it after that date (or where it is otherwise liable for CGT after that date).

In these circumstances you will need to obtain a market value of the asset as at 30 June 2027 in order to get the benefit of the 50% discount on any gain accrued up to that time (unless you choose to use the proposed alternative apportionment method).

However, you may be wondering if you will also be required to obtain a market value for your home under these new rules.

Well, this will depend on whether you already have a partial CGT liability on your home.

This will occur if, for example, before that date, you rented the home before you moved into it or where you rented it after you moved in and you cannot use the “absence concession” to preserve the exemption.

It will also be relevant if you used part of your home to produce assessable income – for example where you ran a business from home, or rented a room or a granny flat at commercial rates.

In these circumstances, you would need a market value of the home at 30 June 2027 to be able to apply the 50% discount to the partial capital gain that accrued up to 30 June 2027.

And the same would be true if the gain accrued after 1 July 2027 (i.e. where you used the home to produce assessable income after that date unless the absence concession can apply).

This is because the new rules will deem you to have sold the home and re-acquired it for its market value on 30 June 2027. This means it is treated as a newly acquired asset after that date. And any gain accruing after that date will be calculated by reference to this new market value cost base.

However, there is a major reason why a market valuation of your home is not required – or at least not at 30 June 2027.

And that is because of the peculiar rule that applies when you first use your home to produce assessable income (eg by way of renting it or for business use).

And that peculiar rule is that you are deemed to have acquired the home for its market value at the time you first use it to produce assessable income – with any capital gain being calculated by this new cost under the inflation-indexation method.

So, a market valuation may not necessarily be required on 30 June 2027 – but it will definitely be required on the date of any subsequent “first income use” of the home after that date.

The interaction of this rule and the new CGT rules for denying the discount can get a bit tricky.

It is definitely an area where you will need our expertise.

So, make an appointment at any time to discuss the matter if you are in this type of scenario.

After the September 11 attacks on the World Trade Center in New York in 2001, it was understood that intelligence and security authorities around the world dramatically increased their technological and detection capabilities.

And, apparently, not long after, many revenue authorities around the world were said to similarly have sought better technological and detection capabilities.

In short, revenue authorities (like business) moved with the technological changes.

The same is now true of the use of AI by revenue authorities. Or at least by the Australian Taxation Office (ATO).

In a recent speech to “The AI Summit Australia”, a Deputy Commissioner of Taxation emphasised that using AI in conjunction with the ATO’s collected data is becoming an increasingly powerful tool for the ATO. And not just in relation to detecting tax fraud.

The Deputy Commissioner also pointed out AI’s ability in “analysing deductions” and “identifying income”.

He concluded by saying that the ATO’s approach is not to deploy AI just for the sake of AI, but to “combine quality data, strong analytics, AI capabilities and human judgement to solve real problems”.

In other words, the ATO indicated that the combination of “AI” and “quality data” means it is becoming increasingly effective in matching its data with a taxpayer’s information in determining whether taxpayers (of all sorts) are declaring all their income and properly claiming deductions and, in the end, paying the right amount of tax.

In this regard, the ATO recently advised that it will continue its passenger movements data-matching program, which will use passenger movement information from the Department of Home Affairs to help the ATO identify incorrect tax reporting.

And this next round is due to run from the 2026-27 financial year through to the 2028-29 financial year.

And in relation to data matching generally, the ATO has advised that when using data matching information against tax returns, in relation to assessable income it looks at such things as interest and investment income, employment income, government payments, capital gains tax from the disposal of shares and property, employment-related foreign source income, payments made to contractors in the building and construction industry, and many other things.

And the upshot of this for all taxpayers is that at the very least it seems that gone are the days when taxpayers could take a “calculated risk” about whether to declare certain income or to claim certain deductions.

At the most, it requires them to be very vigilant in their own tax affairs.

So, if you think this type of matter is relevant to you in any way in this new age of AI and data matching, make an appointment to see us to discuss the matter.

Capital gains tax does not just apply to “big ticket” items such as real estate, farms and shareholdings. It also applies to a special class of assets known as “personal use assets”, and in particular, those personal use assets known as “collectables”.

“Collectables” are specifically defined under the tax law to mean the following items that are “used or kept mainly for your personal use or enjoyment”:

• artwork, jewellery, an antique, or a coin or medallion; or
• a rare folio, manuscript or book; or
• a postage stamp or first day cover.

But for an asset to be a collectable, it must have cost more than $500. Otherwise, any collectable acquired for $500 or less is exempt from being a collectable (but subject to important rules to prevent abuse of this threshold test).

And the most important rule about a collectable is that if you make a capital loss on selling or disposing of a collectable, that capital loss can only be offset against capital gains from other collectables. It cannot be offset against the capital gain from, say, shares or real estate, and nor can it be offset against your other income. That is, the loss is “quarantined”.

Also note that jewellery you inherit from, say, your mother will retain its “character” as a collectable. So, bear this in mind also.

As for “personal use assets” per se (ie assets used for personal use or enjoyment which are not “collectables” – such as furniture, clothing, pianos etc) they are only subject to CGT if they cost more than $10,000. And importantly, you cannot claim a capital loss made on a personal use asset.

It should also be understood that a person who owns “collectables” can do so for the purpose of trading in them. In this case, the CGT rules take a backseat to the fact that the profit from such activities is assessable in the same way as if you were operating a business.

Finally, the recent 2026 Budget CGT reforms will apply to collectables as well. This will mean that you will need to determine their market value as at 30 June 2027 (or use the new apportionment method) for the purpose of applying the CGT discount up to any gain then. Thereafter the “indexation” approach will apply.

However, there are apparently plenty more changes in the pipeline – and we may yet see some form of exception for collectables.

In any event, it is still important to be aware of what assets are “collectables” and how the CGT rules generally apply to them.

So, if you find yourself dealing with such items – especially if they are valuable – it is necessary to get good tax advice on the matter. Make an appointment to see us at any time.

There has been a lot of talk in the media about the government’s new “widow tax” following the Budget brought down earlier in the year.

By way of background the Budget saw the abolition of negative gearing for properties acquired after the Budget night (ie 12 May 2026). So, if you acquired a rental property after that date you won’t be able to negatively gear it (albeit you will still be able to negatively gear it up to 30 June 2027 – but thereafter you won’t be able to).

However, often properties are acquired in joint-names (as opposed to tenants-in-common).

What this means is that on the death of one of the joint owners, their joint interest in the land automatically passes at the time of the person’s death to the other joint tenant under the rule of “survivorship”. It cannot be bequeathed or passed to another person.

(This, apparently, is a longstanding English land law principle that has something to do with doing away with the complexities of conveying land under the “old land law title” system.)

From a negative gearing point of view, it means that a person may “unwittingly” acquire a rental property after 12 May 2026 (that is, specifically a 50% interest in it) – and therefore be denied negative gearing when, in effect, the property was acquired before that date.

It also means that a person may be in the odd position of being able to negatively gear one-half of the property but not the other half of the property.

This is what is meant by the “widow tax” in the media.

However, the government has now remedied this problem by amending the tax law to exclude an interest in property acquired under the “rule of survivorship” from the new negative gearing prohibition. (Likewise, for the same reasons, it has done the same for properties acquired after 12 May 2026 under CGT roll-over relief for relationship or marriage breakdown.)

This matter also raises the general issue of the CGT treatment of jointly owned property – and, in particular, where one joint owner dies and the other party ends up owning both interests in the property.

The starting point in all this is that each joint interest in a property is a separate asset for CGT purposes. So that when for example, a jointly owned property is sold, each joint owner returns their particular share of the capital gain (or loss) in their own tax return.

However, the issue becomes a bit trickier when one joint owner dies. Basically, in this case the surviving joint owner owns two different interests in the land – each with their own “CGT characteristics” of a specific “cost” and a specific “time of acquisition”.

The matter can get more complicated when the “survivor” bequeaths such a property under their will or if the property was originally acquired before 20 September 1985 (in which case market values come into play).

Suffice to say, if you own a jointly owned property, or have any dealings in respect of one, it is worthwhile to make an appointment to see us so we can properly explain how these important rules work – especially in the light of all the recent Budget changes.

With house prices falling in some major capital cities, you may be looking to buy a home – either as a first home buyer or otherwise.

In this case, there are a few important Capital Gains Tax (CGT) matters to take into consideration.

Firstly, there is the rule that a home will only qualify for the full CGT main residence exemption if it was your home throughout your “ownership period” – essentially, being from settlement date on purchase to settlement date on sale.

However, there is an important concession to help you here.

If it somehow proves “impracticable” to move in at settlement, then the full exemption will still apply if you move in as soon as it is “reasonable” or “practicable” to do so.

But a word of warning here: this concession applies narrowly.

It does not apply where it is “inconvenient” to move in as soon as possible after settlement. It must be a “compelling” reason – and this does not include, for example, where the purchased property is still being leased to a tenant.

And note that when this concession was introduced, the government stated that it would only cover the case of “serious illness” and similar such matters.

Secondly, if you already own a home and you end up purchasing your new home before selling your old one, then there is a concession that allows you to treat both of the homes as your “CGT exempt home” for up to a 6 month overlap period.

However, there are important conditions that must be met for this concession to apply – including that your existing home must have been your main residence for at least 3 months in the 12 months before you end up selling it.

These conditions can be quite “tricky” to apply, and will depend on your exact circumstances.

Thirdly, if for whatever reason, you decide to rent the new home first before you make it your home there are several important things to bear in mind.

For a start, you will lose the CGT exemption on your home on a proportionate basis to the extent you rent it first up. (But if you rent it after making it your home on a “bona-fide” basis then there is another concession that allows you to keep the exemption in this case).

Importantly, if you bought the property after 12 May 2026 and you rent it out after 30 June 2027, negative gearing is not available. However, this is subject to an exception if you bought a “new residential dwelling”.

Finally, if you are liable for any CGT on your home because you have only a “partial CGT exemption”, then regardless of when you bought the property, any capital gain that relates to the period after 1 July 2027 will generally be subject to the new “indexation” calculation rules. And this generally does not give you as big an advantage as the former 50% discount.

So, if you are thinking of buying a new home – or a first one – it is worth making an appointment with us to discuss these matters.

Government concession cards, including the Commonwealth Seniors Health Card, Pensioner Concession Card, Health Care Card and state-based Seniors Cards, can save you a lot. They cut the cost of healthcare, prescriptions and everyday bills.

Several rates and thresholds affecting eligibility change on 20 September 2026, so now is a good time to review what the cards are worth and check whether you qualify.

Know your federal concession cards

These cards offer lower prescription costs of $7.70 compared to the general rate of $25, which fell from $31.60 on 1 January 2026. The concession rate is frozen at $7.70 until 2030. Also, once you reach the Pharmaceutical Benefits Scheme (PBS) Safety Net of $277.20 in a calendar year, your PBS medications are free for the rest of that year.

The Commonwealth Seniors Health Card (CSHC) is for self-funded retirees who have reached Age Pension age (67) and are not receiving an income support payment from Services Australia or the Department of Veterans’ Affairs. From 20 September 2026 your adjusted taxable income plus deemed income from account-based pensions must be below $105,048 (singles) or $168,076 (couples combined). A higher limit applies to couples separated by illness or respite care. These limits are indexed on 20 September each year.

The Pensioner Concession Card (PCC) is automatically issued to those on the Age Pension, Disability Support Pension or Carer Payment. You do not need to apply for the card and while you remain eligible a new card is sent to you before the current one expires. If your pension stops permanently due to high income or assets, you must stop using the card. If your Age Pension is instead suspended because of employment income, you can keep the Pensioner Concession Card for up to two years.

From 20 September 2026 the Age Pension income and asset cut-off thresholds increase with indexation.

Age Pension asset limits – 20 September 2026

^ The full pension thresholds change on 1 July each year, not 20 September.

The Age Pension is also subject to an income test. The test that results in the lowest Age Pension entitlement is the test that applies. See Services Australia for information on how the asset and income tests are applied when calculating your Age Pension entitlement.

Income Limits – 20 September 2026

^ The full pension income free areas change on 1 July each year, not 20 September.

Check the Health Care Card too

The Health Care Card (HCC), including the Low-Income Health Care Card, is for those on Centrelink payments like JobSeeker or meeting the low-income criteria. It generally provides the same benefits as the Pensioner Concession Card.

Claim your state and territory concessions

Every state and territory offers concession card holders discounts on utilities such as water, electricity and gas. What you can claim depends on which card you hold.

In the ACT, for example, the electricity, gas and water rebate is open to Pensioner Concession Card and Health Care Card holders but not to CSHC holders. To find out what concessions are available to you, check your state or territory government concession finder.

Add a state-based Seniors Card

Alongside federal concession cards, state-based Seniors Cards offer additional discounts. They cover public transport, dining, entertainment and local services.

Check whether you are eligible

State-based Seniors Cards are generally available for residents aged 60 and over who are no longer working full time. For example, in New South Wales, those 60 or older working an average of 20 hours or less of paid work a week over a 12-month period qualify for a Seniors Card, while those working more hours can apply for a Senior Savers Card. Only the Seniors Card comes with a Gold Opal card.

The Victorian Seniors Card is available for Victorians aged 60 or older, working less than 35 hours per week or fully retired. Those working 35 hours or more can apply for a Seniors Business Discount Card, which gives business discounts but no transport concessions.

In Queensland, you qualify for a Seniors Card or Seniors Card+go if you’re 65 or older and work less than 35 hours per week (averaged over 12 months), or if you’re 60–64, work under 35 hours weekly, and hold a Pensioner Concession Card, Health Care Card, or eligible Department of Veterans’ Affairs card. A Queensland Seniors Business Discount Card is available for those 60 or older.

Reminder

Federal and state-based concession cards help you save. Whether it’s lower-cost medications, discounted transport or savings on local services, these cards support your lifestyle and budget. Speak to us about applying for a concession card if you think you may be eligible.