Capital Gains Tax Planning — Why the Timing of Your Asset Sale Matters

If you’re thinking about selling an investment property, shares, or any other asset before the end of the financial year, the date you sign the contract could be the most important financial decision you make. Capital gains tax planning isn’t just about how much you earn from a sale — it’s about which financial year that gain lands in, and whether you’ve set yourself up to minimise what the ATO takes.

When does a CGT event actually happen?

Most people assume the capital gain is recorded when money hits their bank account — that is, at settlement. In most cases, that’s incorrect. For property and shares, the CGT event is triggered at the date of contract exchange, not settlement. This means if you exchange contracts on 28 June 2026 but settle on 14 July 2026, the gain belongs to the 2025–26 financial year, not 2026–27. Getting this wrong can lead to an unexpected tax bill — or a missed planning opportunity.

The 12-month discount rule

One of the most valuable concessions available to individual investors is the 50% CGT discount. If you’ve held an asset for more than 12 months before the CGT event, only half the capital gain is included in your taxable income. For example, if you make a $100,000 gain on an asset you’ve held for 14 months, only $50,000 is added to your income. If you sell before the 12-month mark, the full $100,000 is assessable. So before you sign anything, check your purchase date carefully — waiting a few extra weeks to cross that 12-month threshold could save you tens of thousands of dollars.  Of course this discount will soon be removed and replaced with a new method and keep a watch out for the new rules when we post them.

When it makes sense to sell before 30 June

Timing a sale before 30 June can work in your favour in some situations. If you have capital losses from other investments sitting unused, crystallising a capital gain this financial year allows you to offset those losses and reduce or eliminate the tax payable. Similarly, if your income this year is unusually high and you expect it to drop next year — perhaps because you’re winding back work or a business has had an exceptional year — bringing a gain forward into the current year may not make sense at all. Consider both sides carefully.

When delaying until after 30 June is smarter

If you expect to have a lower income in 2026–27 — perhaps due to retiring, reducing work hours, or a business slowdown — delaying the exchange of contracts until after 30 June pushes the gain into that lower-income year. Even a modest drop in your marginal tax rate can translate to a significant tax saving on a large gain. The same logic applies if you’re sitting on both gains and losses across different assets: properly timing each sale can let you use losses to offset gains more efficiently across the two financial years.

Talk to us before you sign

The most common and costly mistake in CGT planning is acting first and asking questions later. Once you’ve exchanged contracts, the financial year is locked in. A conversation before you sign can make a substantial difference to your tax position. We can model the scenarios for you — factoring in your total income, any existing capital losses, the 12-month discount, and your expected income next year — so you go into the sale with a clear picture of what to expect.

If you’re considering selling an asset before or after 30 June, please get in touch with us before you exchange contracts — the timing can make a significant difference to the tax you pay.

Division 7A Loans — What Company Directors Need to Check Before 30 June

If your private company has ever lent money to you personally — or to a family member, a related trust, or another entity you control — there’s a good chance Division 7A applies to you. With 30 June approaching fast, now is exactly the right time to check you haven’t accidentally set yourself up for a significant tax bill.

What is Division 7A?

Division 7A is a section of the tax law designed to prevent shareholders and their associates from accessing company profits as tax-free loans. If you borrow money from your own private company without treating it correctly, the ATO can deem that loan to be an unfranked dividend — meaning it gets added to your personal taxable income, with no franking credits to offset the tax you’ll owe. It doesn’t matter that you never intended it as income. If the paperwork isn’t right, that’s exactly how it’s treated.

What makes a loan compliant?

For a loan from a company to a shareholder or associate to avoid being treated as a dividend, it must be documented in a written agreement that meets specific requirements. The loan must carry a minimum interest rate set by the ATO each year (for 2025–26 the benchmark interest rate is 8.77%), and it must be repaid within a maximum term — generally seven years for an unsecured loan, or up to 25 years if the loan is secured by a registered mortgage over real property. The written agreement must be in place by the time the company lodges its tax return for the year in which the loan was made. Division 7A also casts a wide net: it applies not just to formal loans, but to payments made on your behalf by the company and to debts the company forgives. If your company paid a personal expense that was never repaid, Division 7A could apply.

What you need to do before 30 June

If you have an existing Division 7A loan, you need to check that your minimum yearly repayment has been made before 30 June. Missing a minimum repayment means the shortfall is treated as a dividend — even if the underlying loan agreement is otherwise compliant. If a new loan was made during the year and doesn’t yet have a written agreement, the safest approach is to get documentation sorted well before 30 June rather than waiting for lodgement. If the loan balance is large and repayments will create cash flow problems, there are legitimate options — such as paying a franked dividend to offset part of the balance — but these need careful planning.

The cost of doing nothing

The consequences of getting Division 7A wrong can be significant. A deemed dividend adds directly to your assessable income in the year it arises, potentially pushing you into a higher tax bracket. There’s no franking credit to offset it, and there may be penalties and interest on top if the ATO identifies the problem during a review. Division 7A is an area the ATO monitors closely, and with 30 June close, now is the time to act rather than hope for the best.

If you have a loan from your company — or you’re not sure whether one might exist — please get in touch with us before 30 June. We can review your arrangements, make sure required repayments are on track, and put the right documentation in place so you’re not facing an unexpected tax bill.

Budget 2026: The Tax Change That Simplifies Work-Related Expense Claims for Everyone

With 30 June approaching, now is one of the most valuable times of year to sit down and review your business expenses. Many small business owners either miss deductions they are entitled to claim, or claim them incorrectly and invite ATO scrutiny. A thorough pre-EOFY review can make a genuine difference to your tax bill — but it needs to happen before the financial year closes.

Prepaid expenses

If your business is a small business entity — broadly, one with an annual turnover under $10 million — you may be able to prepay certain expenses before 30 June and claim the full deduction in this financial year, even though the service period extends into next year. This includes things like insurance premiums, subscription renewals, rent paid in advance, and professional memberships. The prepayment must cover a period of no more than twelve months starting within the same income year.

Asset purchases and the instant asset write-off

The instant asset write-off allows eligible businesses to immediately deduct the cost of certain depreciable assets rather than writing them off over several years. If you have been thinking about purchasing equipment, machinery, tools, or technology that your business genuinely needs, doing so before 30 June may allow you to bring that deduction forward. The rules around eligibility and thresholds change periodically, so it is worth confirming the current position with your accountant before making a purchase solely for tax reasons.

Home-based business expenses

If you run your business from home, or use a home office for business purposes, you may be entitled to claim a portion of your home running costs — things like electricity, internet, and phone — as well as the decline in value of furniture and equipment used for work. The ATO has specific methods for calculating these claims, and record keeping is important. If you have not been tracking your home office use, now is the time to start.

Vehicle and travel costs

Business-related vehicle use is one of the most commonly underclaimed deductions for sole traders and small business operators. If you use your personal vehicle for work purposes — travelling to clients, visiting suppliers, attending business meetings — you are generally entitled to claim those kilometres. The ATO’s cents-per-kilometre method allows you to claim up to 5,000 kilometres without a logbook, though a logbook provides a more accurate claim if your work-related driving is significant.

Don’t leave money on the table

Other commonly missed deductions include bank fees on business accounts, accounting and bookkeeping software, professional development and training relevant to your current business activities, and income protection insurance premiums where the policy covers loss of business income. Advertising and marketing costs, business-related subscriptions, and the cost of professional advice are also deductible. The key is keeping receipts and records throughout the year — not scrambling at tax time. Your accountant can help you identify every deduction your business is entitled to before 30 June.

Getting your deductions right before 30 June can make a real difference to your tax position. Get in touch with us and we will help you identify everything your business is entitled to claim.

Are You Claiming All the Business Deductions You Are Entitled To?

With 30 June approaching, now is one of the most valuable times of the year to sit down and review your business expenses. Many small business owners either miss deductions they are entitled to claim, or claim them incorrectly and invite ATO scrutiny. A thorough pre-EOFY review can make a genuine difference to your tax bill — but it needs to happen before the financial year closes.

Prepaid expenses

If your business is a small business entity — broadly, one with an annual turnover under $10 million — you may be able to prepay certain expenses before 30 June and claim the full deduction in this financial year, even though the service period extends into next year. This includes things like insurance premiums, subscription renewals, rent paid in advance, and professional memberships. The prepayment must cover a period of no more than twelve months starting within the same income year.

Asset purchases and the instant asset write-off

The instant asset write-off allows eligible businesses to immediately deduct the cost of certain depreciable assets rather than writing them off over several years. If you have been thinking about purchasing equipment, machinery, tools, or technology that your business genuinely needs, doing so before 30 June may allow you to bring that deduction forward. The $20,000 Instant Asset Write Off was announced as becoming a permanent part of our tax laws.

Home-based business expenses

If you run your business from home, or use a home office for business purposes, you may be entitled to claim a portion of your home running costs — things like electricity, internet, and phone — as well as the decline in value of furniture and equipment used for work. The ATO has specific methods for calculating these claims, and record keeping is important. If you have not been tracking your home office use, now is the time to start.

Vehicle and travel costs

Business-related vehicle use is one of the most commonly underclaimed deductions for sole traders and small business operators. If you use your personal vehicle for work purposes — travelling to clients, visiting suppliers, attending business meetings — you are generally entitled to claim those kilometres. The ATO’s cents-per-kilometre method allows you to claim up to 5,000 kilometres without a logbook, though a logbook provides a more accurate claim if your work-related driving is significant.

Don’t leave money on the table

Other commonly missed deductions include bank fees on business accounts, accounting and bookkeeping software, professional development and training relevant to your current business activities, and income protection insurance premiums where the policy covers loss of business income. Advertising and marketing costs, business-related subscriptions, and the cost of professional advice are also deductible. The key is keeping receipts and records throughout the year — not scrambling at tax time. Your accountant can help you identify every deduction your business is entitled to before 30 June.

Getting your deductions right before 30 June can make a real difference to your tax position. Get in touch with us and we will help you identify everything your business is entitled to claim.

Do You Need to Lodge an FBT Return This Year?

The fringe benefits tax year runs from 1 April to 31 March — and if your business provided any non-cash benefits to employees or their family members during that period, an FBT return may be due. The lodgement deadline is 21 May, so now is the time to check whether this applies to you.

What is fringe benefits tax?

Fringe benefits tax, or FBT, is a tax paid by employers on certain benefits they provide to employees, associates of employees, or directors — in addition to, or instead of, salary and wages. The current FBT rate is 47%, which is aligned with the top marginal income tax rate. It is separate from income tax and is calculated on the grossed-up taxable value of the benefits provided.

It is worth noting that FBT is an employer obligation, not an employee one. The employee receives the benefit, but it is the employer who is responsible for calculating, reporting, and paying the tax.

Which benefits commonly trigger FBT?

The most common fringe benefits that create an FBT liability include company cars used for private purposes, car parking provided at or near a workplace, entertainment such as meals, functions, and tickets to events, low or no-interest loans to employees, and living away from home allowances. Housing provided to employees is also a common trigger, particularly in remote locations or when relocating staff.

Not all benefits are subject to FBT. Some are exempt — for example, certain work-related items such as laptops, mobile phones, and tools of trade used primarily for work. Minor benefits with a taxable value under $300 may also be exempt, provided they are provided on an irregular and infrequent basis. Understanding which benefits fall in or out of the FBT net is essential before you conclude that no return is required.

Reportable fringe benefits on payment summaries

If an employee receives fringe benefits with a total grossed-up taxable value exceeding $2,000 in the FBT year, the employer must record a reportable fringe benefits amount on the employee’s income statement. This amount does not increase the employee’s income tax liability directly, but it is taken into account for certain income tests — affecting things like Medicare Levy Surcharge eligibility, HECS-HELP repayments, and government benefit calculations. Employees should be aware of this if it applies to them.

What you need to do before 21 May

If your business has provided fringe benefits during the 2025–26 FBT year, you need to calculate the taxable value of those benefits, prepare and lodge your FBT return, and pay any FBT owing by 21 May 2026. If you are lodging through a registered tax agent, an extended due date of 25 June 2026 may apply. Even if you do not owe any FBT — for example, because all benefits were exempt — it is worth reviewing your position to ensure you are not inadvertently missing an obligation.

If your business has not provided any fringe benefits and you have previously lodged an FBT return, you may need to advise the ATO that you are no longer required to lodge. Your accountant can help you confirm this and make sure your obligations are fully met before the deadline.

FBT is one of the more complex areas of tax compliance — the rules around what is and is not taxable can be tricky, and the cost of getting it wrong can be significant. If you are not sure whether you need to lodge a return, get in touch with us before the 21 May deadline.

Inherited A Home? If You Sell, Watch Out For These Tax Traps!

Inheriting a home can be both an emotional and practical experience.

Alongside the personal significance, there are important tax considerations to be aware of  –  particularly if you decide to live in the property for a period and then sell it.

Understanding how the Australian tax rules apply can help you avoid surprises and make informed decisions.

From a tax perspective, the key issue is capital gains tax (CGT). Whether CGT applies  –  and how much  –  depends on how the property was used both before and after you inherited it.

If the deceased person lived in the property as their main residence and it was not being rented out at the time of death, the starting point is generally favourable. In many cases, the property can be sold CGT-free if it is sold within two years of the date of death. This two-year period is an important concession and often provides flexibility for beneficiaries while estates are being finalised.

However, things can change if you move into the inherited home, live in it, and later sell it. Living in the property does not automatically reset the tax clock or create a new CGT exemption.

The CGT outcome will depend on:

When the property is sold,

Whether it was ever used to produce income (such as being rented), and

The deceased’s original cost base and ownership history.

If the property is sold after the two-year window, a partial CGT exemption may still apply. The capital gain is generally calculated based on the period from the deceased’s date of death to the date of sale, with exemptions applied for periods where the property was treated as a main residence. Importantly, your time living in the property can help reduce or eliminate the taxable gain  –  but it doesn’t guarantee a full exemption.

If the deceased had rented the property out or never lived in it as their main residence, the CGT position can be more complex. In these cases, the property may be fully subject to CGT, and the starting cost base may trace back to when the deceased originally acquired the property  –  sometimes decades earlier.

Another common trap is assuming that no records are needed. In reality, keeping documentation such as probate valuations, ownership dates, and details of any improvements made to the property is critical. These records form the foundation of an accurate CGT calculation.

Inheriting property brings with it both opportunity and responsibility. Before making decisions about moving in or selling, it’s worth getting tailored advice. A short conversation early on can help you understand your options, manage tax exposure, and make choices that align with both your personal and financial goals.

How Does PAYG Make Tax Time Easier For You?

Paying tax can sometimes feel daunting, but the PAYG system is designed to make it easier to manage.

PAYG, or Pay As You Go, allows individuals and businesses to meet their tax obligations gradually throughout the year, rather than facing a large lump-sum payment at the end of the financial year. 

Breaking your tax into smaller, regular payments helps you stay on top of your finances and avoid surprises at tax time.

There are two main parts to PAYG: PAYG withholding and PAYG instalments.

PAYG Withholding

For most employees, PAYG withholding is the way tax is collected. Your employer deducts tax from your wages, salary, or certain other payments before you even receive them, then sends it to the Australian Taxation Office (ATO) on your behalf. The amount withheld depends on your earnings and applicable tax rates, including the Medicare levy.

This system is beneficial because it spreads your tax payments over the year, rather than leaving you with a potentially large bill at the end. It’s a simple way to meet your obligations while keeping a more predictable cash flow in your personal budget.

PAYG Instalments

If you run a business, are self-employed, or earn income from sources other than employment  –  like investments or partnerships  –  PAYG instalments come into play. Rather than waiting until the end of the year, you make regular payments based on either an estimate of your tax or a rate provided by the ATO.

These instalments are usually paid quarterly and can be a helpful tool for managing cash flow throughout the year. At the end of the financial year, your instalments are reconciled against your actual tax liability, and adjustments are made if you’ve overpaid or underpaid.

Why PAYG Matters

PAYG isn’t just about compliance  –  it’s a practical way to stay in control of your finances. For employees, it reduces the risk of unexpected tax bills. For businesses and self-employed individuals, it provides a predictable schedule for meeting tax obligations while avoiding the stress of large, lump-sum payments.

It also benefits the broader economy by providing a steady flow of revenue to fund public services. That said, not keeping up with PAYG obligations can lead to penalties, interest charges, and even audits, so staying informed and organised is essential.

What To Take Away:

  • PAYG spreads tax payments over the year to make them more manageable.
  • Employees generally experience PAYG through tax withheld from wages.
  • Businesses and self-employed individuals pay PAYG instalments on their income.
  • Staying organised and keeping accurate records is crucial for compliance.

By understanding PAYG and keeping on top of reporting and payments, you can manage your tax obligations confidently and avoid unnecessary surprises. 

A little planning throughout the year goes a long way toward a smoother, stress-free tax experience.

The Sacrifices Your Salary Makes Can Prove Fruitful At Tax Time

Salary sacrifice is a strategy in which an employee agrees to forego part of their pre-tax salary in exchange for employer-provided benefits.

These benefits can include superannuation contributions, cars, laptops, or other approved work-related items. 

While it doesn’t change your total earnings, salary sacrifice can have important implications for tax and retirement savings.

How Salary Sacrifice Works

When you salary-sacrifice, the agreed portion of your salary is redirected before income tax is applied. 

For example, if you decide to salary-sacrifice $500 per month into your superannuation, that $500 is deducted from your pre-tax salary, potentially reducing your taxable income. This can lower the amount of income tax you pay and help you save more efficiently for retirement.

Employers then provide the benefit or contribution on your behalf. Common uses of salary sacrifice include additional super contributions, novated car leases, and work-related electronics or equipment. Not all benefits are eligible, so it’s important to confirm what your employer can offer.

Key Considerations

While salary sacrifice can be a tax-effective strategy, there are limits and rules to keep in mind:

  • Contribution caps: For superannuation, there are annual limits on how much you can contribute before incurring extra tax. Exceeding these caps can lead to penalties. 
  • Impact on take-home pay: Reducing your pre-tax salary affects your regular pay, so you need to ensure your essential living expenses are still covered. 
  • Eligibility and rules: Employers may have policies on salary-sacrifice arrangements, and certain benefits must meet specific tax rules to qualify.

Benefits of Salary Sacrifice

  • Potentially lower taxable income
  • Increased superannuation savings for retirement
  • Access to certain work-related benefits in a tax-efficient manner

Salary sacrifice can be a useful tool to improve your financial well-being and retirement savings, but it requires careful planning. It’s important to understand the rules, limits, and potential impacts on your income and future benefits before entering into an arrangement. 

Discussing options with a tax adviser or your employer can help ensure salary sacrifice aligns with your overall goals. Why not start a conversation with a member of our team today to find out how we can help model this for you? 

The Impact Digital Assets You Forgot You Owned Can Have On Your Tax

In today’s digital world, people are accumulating assets in more forms than ever. 

Some are obvious, such as shares or property, while others exist quietly online and are often forgotten until tax time. 

Yet even if you haven’t thought about them in months – or years – these digital assets can still have tax implications that matter to your annual return and your financial wellbeing.

What Counts As A Digital Asset?

When most people think of digital assets, cryptocurrency is the first thing that comes to mind. But the landscape is broader than just crypto. Other examples include:

  • Non-fungible tokens (NFTs) and other blockchain-based collectibles
  • Digital rights or licences you hold online
  • Domain names or websites you own that generate revenue
  • Earnings from online platforms or advertising
  • Loyalty points or rewards with monetary value
  • Digital artwork, licences, or content that generates revenue

These assets – even if they sit idle or you forgot you owned them – can trigger tax consequences when you sell, exchange, swap, or otherwise dispose of them.

Why Forgotten Digital Assets Still Matter

Digital assets are often overlooked because they’re new, intangible, or stored in wallets and accounts separate from traditional financial systems. But tax law treats them like any other asset.

  1. They Can Trigger Taxable Events
     Even if you haven’t “cashed out,” actions like trading one token for another, using crypto to buy goods, or receiving rewards can create taxable events. These may result in capital gains or ordinary income.
  2. Record Keeping Is Essential
     You need records showing when you acquired the asset, what you paid, and what you received when it was sold or exchanged. Without proper documentation, you risk miscalculating gains or losses, which can lead to underpaying or overpaying tax.
  3. Many Owners Are Unaware Of Obligations
     A significant number of digital asset owners are uncertain about their tax obligations. This applies not only to cryptocurrency but also to other online assets with potential income or value.

Common Digital Asset Tax Traps

  • Lost or forgotten wallets, leaving you unsure what you own
  • Rewards, airdrops, or staking returns counted as income even if never converted to cash
  • Swaps or trades triggering capital gains tax, even without a cash exchange
  • Selling NFTs or receiving royalty income is treated like business income

How to Be Better Prepared

  • Maintain comprehensive records for all digital transactions
  • Regularly review all wallets, exchange accounts, and platforms
  • Seek professional advice for guidance on reporting and compliance

Don’t Let Hidden Assets Haunt Your Tax Return

Digital assets have become a normal part of many Australians’ financial portfolios. Whether intentionally held or forgotten in an old wallet, they still matter at tax time. Keeping clear records and understanding your obligations can make tax season smooth and stress-free.

Need Help Navigating Digital Assets at Tax Time?

Digital assets can be complex, and tax rules are evolving. If you’re unsure how your crypto, NFTs, or other digital holdings should be reported, a qualified accountant can provide clarity. Contact us today to review your digital asset positions, ensure compliance, and safeguard your financial future.

Rain, Hail, Or Financial Troubles: How To Make Sure You’re Meeting Your Tax Obligations Promptly

Life doesn’t always go to plan. Unexpected events such as job loss, illness, natural disasters, business downturns, or family crises can make it difficult to meet your tax obligations on time. 

Managing tax bills and lodgments under pressure can be stressful, but support is available to help you navigate these challenges and stay on track.

Why Acting Early Matters

When financial pressures mount, it can be tempting to delay dealing with tax obligations.

However, allowing debts or overdue lodgments to accumulate can lead to penalties, interest charges, and more complex compliance issues.

Reaching out for help as soon as difficulties arise gives you the best chance of finding manageable solutions. Early engagement often means you have more options to reduce stress and protect your financial position.

Ways You Can Seek Support

There are a number of practical approaches if you’re struggling to meet your tax obligations:

  1. Flexible Payment Plans
     Many businesses and individuals can arrange to pay tax debts in instalments rather than in a single lump sum. Structured payment plans help spread the cost and make it more manageable while you regain stability.
  2. Extra Time to Lodge or Pay
     If needed, extensions can sometimes be negotiated to lodge returns or pay outstanding amounts. This can give you breathing room to organise your finances without risking penalties.
  3. Penalty or Interest Relief
     In cases of genuine hardship, penalties or interest may be reduced or waived, easing the immediate financial burden.
  4. Deferred or Reduced Repayments
     Depending on your circumstances, certain repayments may be deferred or, in exceptional cases, partially waived. Decisions are typically based on your ability to pay and supporting evidence.
  5. Reconstructing Lost Records
     If you’ve lost important records due to natural disasters or accidents, help may be available to reconstruct them so you can still meet your obligations.

Special Considerations

Hardship isn’t always purely financial. Personal crises such as illness, mental health challenges, or family emergencies can affect your ability to meet obligations. In these situations, it’s important to communicate your circumstances and seek assistance early. Tailored support can make a significant difference in reducing stress and protecting your financial well-being.

How to Get Started

The key to managing tax obligations in difficult times is communication. Contact a tax professional or relevant authority as soon as possible — you don’t need to wait until after a due date. Be ready to provide details about your circumstances so that any support offered is tailored to your situation.

By taking proactive steps, you can manage your obligations, reduce financial pressure, and focus on getting through challenging times with confidence.