One of the many areas where the big changes to negative gearing and Capital Gains Tax may have an effect is where you use the “absence concession” to allow you to “continue to treat” your home as your CGT-free main residence during an extended absence from the home – including where you rent it out for up to 6 years during this period.

While, at this stage, there appear to have been no direct changes to this concession, some interesting consequences arise from using it under these new tax rules.

For example, if you rent it out during a period of absence, and you have a big mortgage, you may find yourself in a negatively geared position (ie where your taxable rent is less than the deductible rental expenses) – so that you end up with a deductible loss.

Moreover, if you acquired your home before 12 May 2026 (ie Budget-day) you will still be allowed to claim this negative geared loss, as the changes which now “quarantine” negative gearing losses do not apply to property acquired before that date.

In other words, such property is “grandfathered” from the negative gearing changes ie the property is carved out from the changes, but in the expectation that that property will one day cease to be a pre-12 May 2026 property when it is sold or bequeathed to beneficiaries etc.

Suffice to say the combination of this carve out from negative gearing quarantining and the CGT absence concession can provide some benefits – and even some good planning opportunities.

In relation to the CGT discount changes, where the absence concession is used, its effect is to “continue to treat” the home as your CGT-free main residence during your period of absence – so that there will be no CGT consequences on any later sale or disposal.

But this is subject to an important exception: where you rent your home for more than 6 years only a partial CGT exemption will apply – to reflect the period that it was rented for more than 6 years. But even then, that partial exemption will be calculated favourably by reference to the market value of your home when you first rent it and not its original cost.

Nevertheless, the capital gain so calculated will be subject to the new CGT rules regardless of when you acquired the property (unlike the negative gearing changes).

This will generally mean that you still get the 50% discount up to the property’s market value on 30 June 2027, but thereafter any gain that accrues will be subject to the new (less favourable) indexation rules and the minimum 30% tax rate!

And for those that are interested, the 50% CGT discount applying to a partial capital gain from the sale of a home (and other circumstances where a partial CGT exemption on a home arises) actually costs the government some $25 billion to $30 billion in foregone tax each year – and has done so for at least the last 10 years!*

So, given a person’s home is usually their most significant asset, if you think that these changes could affect (or even help) you, please make an appointment to see us about it.

The Government has legislated major changes to capital gains tax (CGT). From 1 July 2027, the 50% CGT discount for individuals, trusts and partnerships will be replaced. In its place comes cost base indexation and a new 30% minimum tax rate on capital gains.

How the 30% minimum tax works

Under the current rules, you pay tax on only half your capital gain on assets held for more than 12 months, with that half taxed at your marginal rate.

The new rules work differently. The 50% discount is removed but your cost base is lifted for inflation. So you only pay tax on the real gain. Then a floor applies to the rate of tax. Even if your marginal rate is below 30%, your real capital gain is taxed at a minimum of 30%.

The measure applies to assets held for at least 12 months. It also brings pre-1985 assets into the net for gains accruing after 1 July 2027. Your family home stays exempt. Super funds are not affected and keep their existing discount.

Why it matters for self-funded retirees

The minimum tax is aimed at people who sell assets in low-income years. Retirement is the obvious example.

Many self-funded retirees have little taxable income. They often plan to sell shares or property in retirement, when their marginal rate is low. The new rules take much of the value out of that plan. A retiree with a marginal rate of 16% would still pay 30% on a real gain. That is close to double the tax on the same sale today.

Age pensioners are exempt

There is an important carve-out. The Treasurer has confirmed that recipients of certain government payments, including the Age Pension and JobSeeker, will be exempt from the 30% minimum tax. Pensioners would keep being taxed at their marginal rate.

A word of caution on the pension

The Age Pension is means tested. To qualify you must pass both an income test and an assets test. You must also meet the age and residency rules.

If the pension is part of your plan, a few points help. Know the assets test thresholds and where you sit against them. Remember your home does not count as an asset. Watch the gifting rules, as you cannot simply give assets away to qualify. And think carefully about the timing of any large sale.

This article is general information only. It does not take account of your objectives, financial situation or needs, and it is not personal financial or taxation advice.

Self-managed super funds are generally not allowed to borrow money. A limited recourse borrowing arrangement, or LRBA, is one of the few exceptions. It lets a fund borrow to buy a single asset, with the lender’s rights limited to that asset alone. If the loan goes bad, the lender can take the asset but cannot touch the rest of the fund. That protection is what makes the arrangement attractive to many trustees.

How an LRBA works

Under an LRBA, the borrowed money is used to buy one asset, which is held in a separate holding trust until the loan is repaid. The fund makes the repayments and, once the loan is paid off, takes full ownership of the asset.

The law allows a fund to borrow for a single acquirable asset, or for a parcel of identical assets that have the same market value. A common example is a parcel of shares. The fund can use an LRBA to buy shares, but they must all be in the same company. A bundle of different shares does not qualify, because that would be more than one asset.

What is changing

A new law will soon restrict what an SMSF can borrow to buy. Once it takes effect, a fund will no longer be able to use an LRBA to acquire residential property.

This is a significant change. Residential property has been one of the most popular uses of LRBAs, with many funds borrowing to buy a house or unit as a long-term investment. That door is closing for new arrangements.

What you can still borrow for

LRBAs are not being abolished. A fund will still be able to use one to buy business real property, broadly meaning land and buildings used wholly and exclusively in a business. This might include a commercial premise. A fund will also still be able to borrow to buy a parcel of identical shares or other listed securities, provided they are all the same. Units in a managed fund remain available too, again as long as the units are identical, being the same class in the same fund. So the change is targeted. It removes residential property from the list, while leaving genuine business premises, shares and managed fund investments available.

When the change starts

The restriction applies from 10 August 2026.

Importantly, arrangements already in place are protected. If your fund entered into a borrowing arrangement before the start date, it is not affected. Refinancing an existing loan is also allowed. And if your fund has signed a contract to acquire an asset before the start date, that arrangement is not impacted even if settlement happens afterwards.

What this means for you

If you are considering using an LRBA to buy residential property, timing matters. Once the change commences, that option is gone for new arrangements. If a commercial property or share investment is part of your plan borrowing will remain being available.

This article is general information only. It does not take account of your objectives, financial situation or needs, and it is not personal financial or taxation advice.

What this means for you

If your family trust gives a company a share of trust income but does not actually pay it across, the High Court has confirmed this is not automatically treated as a loan back to the trust. That matters, because being treated as a loan could trigger an unexpected tax bill under the rules known as Division 7A.

The background

Many family trusts distribute income to a related company, often called a “bucket company”, but leave the money sitting in the trust rather than paying it over. When income is owed to a beneficiary but not yet paid, it is called an unpaid present entitlement, or UPE.

For about 15 years the ATO took the view that if the company did not call for its money, the unpaid amount worked like a loan from the company back to the trust. On that view, the arrangement could be taxed as if a dividend had been paid, unless the trust put a formal loan agreement in place and made regular repayments.

The Bendel case put that view to the test. A trust controlled by Mr Bendel set income aside for a related company year after year. The company never asked to be paid, and the funds stayed in the group. The ATO assessed the unpaid amounts as loans and taxed them.

What the High Court decided

On 10 June 2026 the High Court ruled in favour of the taxpayer, by a five to two majority. It found that simply leaving an entitlement unpaid is not a loan.

The key point is that a loan needs an obligation to repay money that was advanced. Here, the company had not advanced anything. It had simply chosen not to call for what it was owed. Doing nothing, the Court said, is not the same as making a loan or providing finance. The unpaid amount remained the company’s entitlement, but it did not become a debt the trust had to repay until the company actually asked for payment.

In short, the long-standing ATO position has been overturned.

The ATO’s response

The ATO has said it welcomes the clarity and is considering what the decision means. It will release further guidance for affected taxpayers as soon as it can.

Where this leaves you

This is a helpful outcome, but it does not mean unpaid entitlements can be ignored. The result turned on the specific wording of the trust deed and the fact that the company never called for payment. Other tax rules can still apply, and how the decision affects your trust will depend on your own arrangements.

There is also a longer-term question mark. The Government has proposed taxing trust income at a minimum rate from 1 July 2028, which could reduce the appeal of distributing income to companies in any case.

If your trust uses a bucket company, please speak to us so we can review where you stand.

If you are a foreign resident for tax purposes when you sell your Australian home, you cannot claim the usual capital gains tax exemption on it. This applies no matter how long you lived in the home. It applies even if you were only a foreign resident for a short time before the sale.

And there is no apportionment. It is an all or nothing thing. And what’s more your capital gain will not be entitled to a full CGT 50% discount (under the current rules). Rather, you will only get an apportionment for the time you were a resident.

And to make matters worse you will be taxed on the gain at higher foreign resident tax rates.

Oh, and because the home is real property in Australia, it will be easy for the ATO to chase things up and capture the sale transaction through its data matching processes and matching that with, say, your new foreign address.

So, its important to get things right if you are going to become a foreign resident and you intend to sell your home. And don’t forget, the time of the sale is when you make the contract of sale (ie exchange contracts) and not when you settle on the sale.

However, there are several important exceptions to this rule

The first, involve where a person has been a foreign resident for less than 6 years and they sell the home because of serious illness or a death in the immediately family (as such “life event” exceptions are strictly defined in the legislation).

There is also another important “life event” exception and that is where there is a marriage or relationship breakdown within 6 years of becoming a foreign resident and the CGT rollover for this relationship breakdown would be available.

But even in this case, the exception operates on a narrow basis.

It only applies if one of the spouse’s interests in the home is transferred to the other spouse and, further, this transaction would be entitled to the CGT rollover under the relevant means set out in the legislation.

However, it must be stressed that this exception does not apply if there is a marriage or relationship breakdown and the former home is sold to a 3rd party as part of the settlement of matters. This is simply because the CGT rollover would not apply in this case, as it only applies to appropriate transfer of assets between the spouses – and not to third parties!

So, it’s a big trap to be aware of – especially in circumstances where say a separating spouse leaves the country to start a new life without yet dealing with the former matrimonial home.

If you find yourself in this type of situation, please speak to us before you head overseas – so something can be arranged before you become a foreign resident. It may be too late otherwise.

Likewise, come and speak to us if you are ensure what your residency status will become – as this is the crucial variable

If you have a family trust there are two recent major (very major) things that have happened that will affect the way they will be taxed in the future.

The first is the announcement in the Budget that trust income will now be taxed to the trust at a minimum rate of 30% regardless of how it is ultimately distributed to beneficiaries.

However, under the proposed measures, individual beneficiaries to whom that trust income is later distributed will get a credit for the tax paid by the trust to prevent double taxation. But a credit will not be available where this trust income is distributed to a corporate beneficiary.

These measures are due to start on 1 July 2028 but no doubt will be subject to tremendous scrutiny in the meantime before any final legislation is passed.

Nevertheless, it is never too early to start looking at things and making some plans.

The other major thing that happened that affects family trust was a decision of the High Court in Bendel’s case. And that decision applies immediately.

In that case the High Court ruled that where a corporate beneficiary of a trust is made entitled to trust income, but this income is not paid over to them, then the ATO cannot say that this is a taxable dividend paid back to the trust from the company.

Rather, in this case, where the income is “set aside” for the corporate beneficiary and retained by the trust (ie where an “unpaid present entitlement” arises) there will be no income tax consequences for the trust and the ATO cannot claim that a “deemed dividend” has arisen.

However, it seems that this decision is dependent on the corporate beneficiary not calling for this debt owed to it to be paid.

Also, in the light of this case, it may be that you are entitled to an amended assessment and a refund of tax if the ATO has now wrongly applied these “deemed dividend” rules in the past few years.

It should also be emphasised that the proposed Budget changes to taxing trust income will presumably make distribution of trust income to corporate beneficiaries no longer viable or tax effective (if the Budget measures proceed in their current form).

In any event, regardless of how the Budget reforms for trust income pan out, it is the time to come and speak to us about how your family trust operates so that you can be satisfied that all bases have been covered – and all possible impacts planned for (as far as possible).

On 12 May 2026, the Federal Government delivered its fifth Budget. It was one of the most dramatic and significant budgets in decades. Among other things, it announced that negative gearing would be abolished for property purchased after 1 July 2027 (albeit, grand-fathering pre-Budget arrangements).

It also announced that the CGT discount will not be available from 1 July 2027 (except in respect of qualifying “new builds”). It also proposed a minimum 30% tax on trusts (with certain exceptions). There are also several other significant changes.

We have put together a summary of these key changes and how they may affect taxpayers – especially small to medium business. So, it is important to come and speak to us. However, the proposed measures may be subject to changes before their implementation.

CGT discount replaced

BUDGET MEASURE: From 1 July 2027, the 50% CGT discount is replaced with cost base indexation plus a 30% minimum tax on real gains. Applies to all CGT assets including pre-1985 assets, with gains accrued before 1 July 2027 grandfathered. Investors in eligible new builds can elect either system, and income support recipients are exempt from the 30% minimum tax.

How it works in practise

IN A NUTSHELL: if you buy and sell an asset after 30 June 2027, the new rules apply (ie indexation and minimum 30% tax rate); if you buy and sell an asset before 1 July 2027, the existing 50% discount applies and there is no minimum tax rate; and if you buy an asset before 1 July 2027 but sell it after that date, then you will get the discount up to the asset’s market value on 1 July 2027 and thereafter you will only get indexation plus a minimum 30% tax rate on any gain from that date.

Importantly, the new rules apply to all assets (eg shares) and not just real property.

However, for “new builds” (as defined) they will be entitled to choose either the 50% discount or indexation and the minimum 30% tax rate. But it is not clear if this only applies to new builds after 1 July 2027.

One bit of tax planning you may consider: is that if you intend to sell an asset to use a low tax rate, it may be best to try to do this by 1 July 2027 – before the minimum 30% rate kicks in.

Also note that if you own a pre-CGT asset (ie one acquired before 20 September 1985), they will no longer be excluded from CGT but will be subject to CGT after 1 July 2027 – but with a cost base equal to its market value at that date.

But the devil will be in the legislative detail – and after a year of consultations and submissions.

Negative gearing limited to new builds

BUDGET MEASURE: From 1 July 2027, losses on established residential property acquired after 7:30pm AEST 12 May 2026 can only be deducted against rental or residential property capital gains income. Properties held (or under contract) before that time are grandfathered.

Our analysis

This aligns the Australian tax system with other jurisdictions and, together with the CGT indexation changes, should have some impact on the demand side for residential housing. But importantly, note the “grandfathering” of negative gearing arrangements already in place. (How far it shifts the affordability dial for young people trying to get a foothold in the housing market remains to be seen – especially in the light of ongoing supply problems.)

30% minimum tax on discretionary trusts

BUDGET MEASURE: From 1 July 2028, a 30% minimum tax will be applied to the taxable income of discretionary trusts, payable by the trustee, with exemptions for unit and widely-held trusts, complying super funds, special disability trusts, deceased estates and charitable trusts. Primary production income, certain vulnerable minor income, and income from existing testamentary trust assets are also excluded. Three-year rollover relief from 1 July 2027 will be provided to assist restructuring.

What to watch

Presumably this new trustee tax only applies to income to which beneficiaries are made presently (or specifically) entitled to during the particular tax year and that the current 47% tax rate will continue to apply to income to which no beneficiary is presently entitled – otherwise trusts might still be a useful accumulation vehicle.

In other words, it is in effect a 30% minimum tax on trust distributions. Also note despite the carve out for deceased estate trusts etc, this does not include testamentary discretionary trusts (as opposed to testamentary fixed trusts) – which will be subject to the 30% minimum tax rate.

But, again, the devil will be in the legislative detail – and after a year of consultations and submissions.

$20,000 instant asset write-off made permanent

BUDGET MEASURE: The $20,000 instant asset write-off will be permanently extended for small businesses with aggregated turnover under $10 million. It will apply to eligible assets first used or installed ready for use from 1 July 2026.

Our analysis

Three years of annual extensions made permanence almost inevitable but the real win is ending the late-legislation cliffhanger that had become a genuine planning headache. The threshold itself is unchanged and won’t be indexed, meaning its real value continues to erode. The Opposition proposed lifting it to $50,000 in the Budget reply. Worth noting the per-asset basis still applies, so multiple sub-$20,000 purchases can each be written off, and the measure pairs usefully with the reintroduced loss carry-back rules.

Loss carry-back reinstated

BUDGET MEASURE: Companies with global turnover under $1 billion can carry losses back two years, from 1 July 2026. Separately, loss refundability for start-ups (turnover under $10 million, first two years of operation) applies from 1 July 2028.

Key Features and what’s new

This is a permanent measure, unlike the temporary loss carry-back rules that applied during the COVID years. Treasury estimates it will reduce receipts by $2.3 billion over five years and benefit around 85,000 companies.

Key features to note:

• Revenue losses only (capital losses don’t qualify)
• Available only to companies — not trusts, partnerships or sole traders
• Delivered as a refundable tax offset, not a deduction
• Capped by the company’s franking account balance at year-end
• Losses can be carried back against tax paid in the prior two income years

The start-up loss refundability measure is new and shouldn’t be confused with carry-back. Because new companies typically have no prior tax to recover, the refund is instead capped at the FBT and PAYG withholding paid on Australian employee wages in the loss year — effectively rewarding early-stage hiring. It applies for the first two years of operation only and starts from 1 July 2028, so there’s a long lead time before it bites.

$1,000 instant tax deduction

BUDGET MEASURE: From the 2026–27 income year, individuals can claim a flat $1,000 for work-related expenses without itemising (charitable donations and professional memberships still claimable on top).

Practical implications

This is a welcome simplification and replaces the long-standing $300 substantiation threshold, which had been left unchanged for many years and fallen well behind inflation. Treasury expects 6.2 million workers (around 42% of taxpayers) to benefit, with an average saving of about $205. Keep in mind it’s a deduction, not a refund, so the cash benefit depends on your marginal tax rate. This translates into roughly $160 at the bottom rate to $450 at the top (excluding Medicare levy).

More deductions are always welcome, especially where they don’t have to be substantiated. But it’s still worth keeping written evidence of work-related expenses for at least one year to confirm which option suits. The $1,000 threshold is easy to exceed. Keep in mind the ATO’s fixed-rate WFH method alone (70c per hour) reaches it at around 27 hours per week of home-based work. This is before adding car use, tools, self-education or professional subscriptions. Charitable donations and union/professional fees remain separately claimable on top, so they don’t need to be weighed against the $1,000 instant tax deduction choice.

Working Australians Tax Offset

BUDGET MEASURE: A new $250 permanent tax offset for income from work, from the 2027–28 income year, lifting the effective tax-free threshold to $19,985 (or $24,985 with LITO).

Key points

The impact of this measure is to effectively increase the tax-free threshold for work income by to $19,985, or up to $24,985 when combined with the Low Income Tax Offset. The Treasurer has called it the largest permanent increase in the effective tax-free threshold since 2012–13.

A FEW POINTS WORTH NOTING:

• It’s automatic, meaning no claim required on the return.
• Limited to work income (wages, salaries and sole trader business income). Investment income, trust distributions and company dividends don’t qualify. This is consistent with the budget’s broader shift in tax weight from labour toward capital, paired with the negative gearing and CGT reforms.
• It’s a non-refundable offset, so it reduces tax payable but doesn’t generate a cash refund of its own. 97% of the 13 million eligible workers are expected to receive the full $250 and the remaining 3% are very low earners whose tax bill is already below that.
• The first cash impact lands when 2027–28 returns are lodged from mid-2028.

Worth being precise with clients: the WATO stacks with the legislated rate cuts (16% → 15% from July 2026, then 14% from July 2027), the $1,000 instant tax deduction, and the existing LITO. The government’s “five tax cuts” headline figure combines all of these — the WATO alone is a modest $250.

Superannuation – no changes

No super changes were announced in this Budget. Keep in mind that from 1 July already legislated changes such as the Division 296 tax on balances above $3m and Pay day super start. So “no new changes” doesn’t mean that nothing changes on 1 July.

Superannuation funds (including SMSFs) are explicitly excluded from both the new CGT regime and the negative gearing restrictions on residential property. This widens an already meaningful gap:

• SMSFs retain the one-third (33.3%) CGT discount on assets held over 12 months. Combined with the 15% accumulation-phase rate, that’s an effective CGT rate of around 10% on long-held assets and 0% in pension phase. Keep in mind the new Division 296 tax on higher super balances can change this. Outside super, the new regime delivers a minimum 30% on real gains for individuals and most trusts.
• SMSFs can continue to fully deduct losses on both new and established residential property against other fund income. This is a structural advantage now unavailable to individuals buying established property after Budget night.

With the end of the financial year coming up, now’s a great time to get on top of your tax and super. A little planning before 30 June can help you make the most of any opportunities to reduce tax, boost your super, and avoid last-minute surprises.

This checklist outlines key things to consider and action before the financial year wraps up. It’s a simple way to stay on track and finish the year with confidence.

TAX CHECKLIST

Here are some practical things to consider before 30 June to help you tidy up your tax position and potentially reduce your bill.

Bad Debts

If you’re running a business, write off any bad debts that won’t be recovered before 30 June so they can be claimed.

Employee Bonuses and Director Fees

Planning to pay employee bonuses or director fees? Make sure they’re confirmed in writing and communicated to recipients by 30 June, even if payment happens later.

Charitable Donations

Bring forward any planned donations and have the highest-earning family member make the gift.

Remember:

• Donations must be to registered charities.
• They can’t create a tax loss.
• Keep receipts.

Prepay Interest on Loans

If you have a loan for an income-generating asset (like an investment property), consider prepaying interest before 30 June to bring forward the deduction.

Claim Work-Related or Business Costs

Bring forward costs such as repairs, stationery, or supplies by 30 June 2026. These small deductions can add up. This applies to all taxpayers, not just businesses.

Prepay Expenses

You can claim prepaid expenses, such as insurance or subscriptions.

Where the expense is:

• Under $1,000 – all taxpayers can claim the expense
• Over $1,000 – fully deductible if you’re a small business if the expense relates to a period of 12 months or less. Note that this is also available if it’s a non-business expense of individuals, such as work related expenses or rental property costs.

Write Off Old Stock

If you hold stock, write off any damaged, outdated or unsellable items before 30 June 2026.

Review Assets & Depreciation

Small businesses (turnover under $10m) can immediately deduct assets under $20,000 that were acquired from 1 July 2025 and ready to use by 30 June 2026.

Also, remove any old equipment from your depreciation schedule if it’s been sold, thrown out, or is no longer usable.

Electric Vehicles

If your business provides an electric vehicle to an employee, you may be eligible for depreciation deductions and Fringe Benefits Tax (FBT) concessions.

Defer Income

If possible, delay receiving income (like issuing invoices) until after 30 June to push tax into next year.

Offset Capital Gains

Selling an asset this year with a profit? You could crystallise capital losses before 30 June to offset that gain.

Watch out: ‘wash sales’ (selling and rebuying the same asset just to get a loss) are not allowed.

Personal Services Income (PSI)

If you’re working in your own name (like a contractor or freelancer), check that your income qualifies as a business under PSI rules.

Business Losses

If your business runs at a loss, you may not be able to claim that loss if you carry on a “non-commercial business” – unless you pass one of the ATO’s tests (eg, income, asset, or profit test).

Company Loans to Shareholders (Division 7A)

If you’ve borrowed from your company, the loan needs to be properly documented, put on commercial terms and repaid.

If repaying through dividends, make sure the dividends are legally declared and paid prior to 1 July (with appropriate documentation in place).

Trust Distributions

If you’re a trustee, resolutions must be made before 30 June to properly distribute income to beneficiaries.

You also need to let your beneficiaries know what they’re entitled to.

Beneficiary TFN Reporting

If new beneficiaries gave you their TFN between April -June, you must lodge a TFN report by 31 July 2026.

Motor Vehicle Logbook

Planning to claim car expenses using the logbook method? Start now and track 12 weeks of usage (can span over two tax years). Also record your odometer readings and remember to fill out the logbook at the end of each business journey.

Private Health Insurance

Make sure you have the right level of cover to avoid the Medicare Levy Surcharge, especially if your family situation has changed (eg. new baby, separation, adult children moving off your policy).

Check Your Insurance Cover

Review your personal and business insurance needs. Not only does this provide peace of mind, some policies may also be tax deductible, especially if prepaid.

Review Your Business Structure

Is your current setup still the right one? Changes in income, family, or risk levels may mean a trust, company, or restructure could be more effective. We can help you weigh up your options.

TIP
Unused limits for 2020–21 expire after 30 June 2026 so don’t miss out.

SUPER CHECKLIST

Make the most of your super before 30 June 2026 with these smart, simple tips.

Check Your Contribution Limits

Before adding more to super, log in to myGov > ATO > Super > Information to check how much you’ve already contributed.

Tip: If you’re in an SMSF, your info may not be up to date in myGov but we can help you work this out.

Add to Super and Claim a Tax Deduction

You may be able to make a personal deductible contribution and claim it at tax time.

To be eligible:

• You must be over 18
• If you’re 67–74, you must meet the work test or qualify for a work test exemption
• If you’re over 75, you must contribute within 28 days of your birthday month

Don’t forget: To claim a tax deduction, submit a Notice of Intent to Claim a Deduction to your super fund and get their confirmation before lodging your tax return or making withdrawals, rollovers, or starting a pension.

Use Up Unused Contribution Limits

Haven’t used your full concessional contribution cap in recent years? You may be able to catch up using the carry-forward rule if your total super balance is under $500,000 on 30 June 2025.

Split Contributions with Your Spouse

You can split up to 85% of your 2024–25 concessional (pre-tax) contributions with your spouse before 1 July 2026.

This is a great way to even out your balances and plan ahead for retirement.

Note – To use this strategy, your spouse must be under their preservation age or aged 64 or younger and not retired when you make the request to your fund.

Get a Tax Offset for Spouse Contributions

If your spouse earns less than $40,000, consider making an after-tax contribution to their super.

By doing so, you could get up to a $540 tax offset while boosting their retirement savings.

Grab a Government Co-Contribution

If you earn less than $60,400 and at least 10% comes from work or running a business, you could be eligible for a government co-contribution. All you need to do is add up to $1,000 to your super and the government may add up to $500 extra.

Avoid the Division 293 Tax Trap

If your income (plus employer contributions) is over $250,000, you may pay an extra 15% tax on some of your super contributions.

Strategies like bringing forward expenses or deferring income may help keep you below the threshold.

Maximise Non-Concessional (After-Tax) Contributions

If you’re under 75, you may be able to contribute up to $360,000 in one year using the bring-forward rule.

New rules from 1 July 2026 may allow you to contribute even more – speak with us about getting the timing right.

Take Your Minimum Pension Payment

If you’re drawing a pension from your super, make sure you take the minimum amount by 30 June.

Missing the minimum may affect your fund’s tax benefits for the whole year.

Need Help?

We’re here to help you make the most of EOFY tax and super opportunities. Contact us to discuss what options might work best for your situation.

If you’ve turned 67 and want to top up your super and claim a tax deduction for doing so, there’s one extra hurdle to clear: the work test. It’s a simple requirement, but it catches people out, so it’s worth understanding when it applies and how to meet it.

What the work test is

The work test requires you to be gainfully employed for at least 40 hours in any 30 consecutive day period during the financial year you make the contribution. “Gainfully employed” means working for payment or reward as an employee or self-employed, in a business, trade or profession. Unpaid work, including volunteering, doesn’t count.

The 40 hours needs to be completed over a 30-day window in the financial year. You only need to meet it once in the year.

When it applies

Since 1 July 2022, the work test no longer applies to non-concessional contributions. However, the test still applies if you’re aged 67 to 74 and want to claim a tax deduction for a personal contribution. It’s the gateway to turning a personal contribution into a concessional (tax-deductible) one. Once you turn 75, you generally can’t make personal contributions, except for Downsizer contributions, so deductible contributions are not ordinarily available from 75.

However, there is a small window which allows personal contributions received within 28 days after the end of the month you turn 75 to be accepted.

Who checks it?

Your super fund used to ask for a work test declaration before accepting your contribution. Now, the ATO checks at the time you lodge your tax return and claim the deduction. The responsibility sits with you to keep evidence of having met the test. For example payslips, invoices, or a record of self-employed work and hours.

The work test exemption

If you’re recently retired and didn’t work in the year you made the contribution, you may still claim a deduction using the one-off work test exemption.

You must:

• have met the work test in the previous financial year
• have had a total super balance under $300,000 at the end of the previous financial year, and
• not have used the exemption before.

It’s a once-only opportunity, designed to give recent retirees a final chance to make a deductible contribution.

Claiming the deduction

Meeting the work test is only one step. To claim the deduction, you must make the contribution into your super fund and

• Lodge a “notice of intent to claim a deduction” with your fund, and
• Receive an acknowledgment from the fund before lodging your tax return.

Without that acknowledgment, the deduction can’t be claimed, even if you met the work test. The deduction also can’t create a tax loss, so size the contribution against your taxable income.

The bottom line

If you’re between 67 and 74 and planning a personal deductible super contribution, remember the work test. Forty hours of paid work in a 30-day window. Speak to us if you’re unsure whether your situation qualifies.