With 30 June approaching, now is the time to make sure your tax affairs are in order. This year, the focus is on making sure the right decisions are documented, the right structures are in place, and nothing falls through the cracks.
The 2026–27 Federal Budget proposed various tax changes, including, most relevantly for business owners and family groups, changes to CGT, negative gearing and discretionary trusts. These measures will not generally change the 30 June 2026 year-end steps outlined in this article, but they may affect future planning for trusts, investment properties and asset sales. The Budget measures remain subject to legislation.
The increasing complexity of Australia’s tax laws means that year-end planning is not optional, it’s a real requirement for most business owners and family groups. Below, we’ve outlined the key areas to consider and discuss with your advisor before 30 June.
If you have a family trust or a private company, the decisions about how income is distributed (and to whom) need to be made and documented before 30 June. This is not something that can be done after the event when the tax return is being prepared.
For trusts, the trustee resolution must be signed or agreed to before 30 June (or earlier, if the trust deed requires it). For companies, dividend resolutions should also be resolved by 30 June, even though the formal dividend statements can follow by 31 October.
We understand this can feel like a lot of paperwork, and that making decisions based on projections before the year is finalised isn’t always easy. But the Australian Taxation Office (ATO) takes this very seriously and its systems can check when documents were actually created, and backdating a resolution carries real legal and tax consequences. Recent court decisions have reinforced that 30 June is the “snapshot” moment: what is decided and recorded by that date is what counts.1
Talk to your advisor: Make sure your trust and company distribution decisions are locked in and signed before 30 June. If you’re unsure what resolutions are needed, raise it with us now, not after financial year-end.
A Family Trust Election (‘FTE’) is a choice made by a trust to be treated as a “family trust” for tax purposes. It nominates a specific individual (the “specified individual”), and all trust distributions must flow to that person’s “family group.” If a distribution goes to someone outside the group, a penalty tax of 47% applies.
An FTE is not something to rush into, but it is important for a number of reasons. Trusts with an FTE can more easily carry forward and use tax losses, access franking credits, and qualify for the small business restructure rollover. For many family groups, the election is essential.
The key issue we see is not whether an FTE should be made, but whether one has already been made, and whether the current distribution arrangements are consistent with it. Changes in family circumstances - such as a divorce or a succession event - can mean that what was once a safe distribution is now outside the family group.
This is an area of significant ATO focus. A high-profile case saw a family group hit with over $13 million in tax because a new accountant nominated the wrong person as the specified individual, not realising an election had already been made with a different family member.2 The ATO has also flagged that from the 2027 income year, trust tax returns will require disclosure of the specified individual - meaning mismatches will be more visible.3
The ATO has offered potential reductions in interest charges of up to 80% for groups that voluntarily disclose Family Trust Distribution Tax issues before 31 December 2026. After that date, a tougher approach is expected.4
Talk to your advisor: If your group has trusts, check whether an FTE has been made and whether your current and historic distributions are consistent with it. Raise any concerns about succession or family changes before distribution decisions are finalised.
When a trust distributes income to a company on paper, but the money isn’t actually paid across, the amount sits on the books as an “unpaid present entitlement” or UPE. For over 15 years, the ATO has treated these UPEs as loans from the company back to the trust, which brings them within Division 7A - the rules that prevent private companies from making tax-free loans or payments to their shareholders and associates.
The Full Federal Court ruled in early 2025 that UPEs are not loans for Division 7A purposes, which was a major departure from the ATO’s position. The ATO has appealed to the High Court, and a decision is expected later this year. In the meantime, the ATO continues to apply its existing view.
For now, this remains a “wait and see” area. If your group has large or complex UPE balances, it’s worth discussing with your advisor to check the current arrangements.
Talk to your advisor: If your trust has unpaid amounts owed to a company beneficiary, make sure these are on complying loan terms and discuss the position with your advisor.
One of the ATO’s key focus areas is whether the person or entity named in a trust distribution actually receives and uses the benefit of that money. If trust income is distributed to a low-income family member on paper, but the funds are then directed back to (or used by) someone else, the ATO can apply its “reimbursement agreement” provisions (section 100A) to effectively override the distribution and tax the income at the top rate.
Importantly, section 100A has no time limit for the ATO to amend an assessment. This means distributions from years ago can still be reviewed.
Talk to your advisor: As a general rule, the person named in the distribution should be the person who genuinely benefits from the money. If you’re unsure whether your current arrangements pass this test, raise it with us.
The Federal Budget announced a proposed 30% minimum tax on discretionary trust taxable income from 1 July 2028. The tax would be paid by the trustee, with non-corporate beneficiaries receiving a non-refundable credit.
Expanded rollover relief is also proposed for three years from 1 July 2027 for small businesses and others restructuring out of discretionary trusts into another entity type, such as a company or fixed trust. This does not change what needs to be done before 30 June 2026, but it does mean your group may need to start modelling whether the current structure still works appropriately.
If your trust receives franked dividends from shares it holds, both the trust and the beneficiary receiving the income must satisfy a “holding period rule” to claim the benefit of the franking credits. In simple terms, the shares must be held “at risk” for at least 45 continuous days around the ex-dividend date (90 days for preference shares).
Where this catches people out is with new beneficiaries or new companies. If a company has only just been set up, or a new beneficiary has only recently been added to the trust, they may not have been in existence long enough to satisfy the 45-day rule. In that case, the franking credits can be lost entirely, even though the trust itself has held the shares for years.
For example, if a trust receives a franked dividend in late May and then distributes it to a company that was only incorporated in June, the company has not held its interest for 45 days and will not be entitled to the franking credit tax offset.
Talk to your advisor: If your trust is receiving franked dividends and you’re considering distributing to a newly established company or a recently added beneficiary, discuss the 45-day rule with your advisor before the distribution is made.
A capital gains tax (CGT) event is triggered when a contract is signed - not when settlement occurs.
The small business CGT concessions can provide substantial tax savings when selling business assets, but they are complex and have strict eligibility requirements. Three issues we frequently see are:
The 15-year exemption and “retirement”: The ATO is increasingly scrutinising how the sale proceeds are used. If the money is gifted to children, directed to a family trust, or not genuinely put towards your retirement, the ATO may deny access to the 15-year exemption.
Prior use of concessions: If you used a CGT rollover concession in a previous year (e.g. to defer a gain into a replacement asset), the two-year period to acquire the replacement may be expiring, or the replacement asset may have since been sold or its use changed. This can trigger a gain in the current year.
The “active asset” assumption: Don’t assume a long-held asset that was used by your small business automatically qualifies after the business has ceased. Even if you’ve held a property for decades and used it for your small business for more than 7.5 years, you still need to satisfy either the $2 million aggregated turnover test (which requires a current business) or the $6 million maximum net asset value test. With rising land values, many clients who previously qualified now exceed the $6 million threshold. Agistment of land is generally not a “business” for these purposes, which particularly affects farmers winding down their operations.
Talk to your advisor: If you are considering selling a business, shares, or significant land, talk to us before you sign.
If you receive compensation from mining, gas, or wind farm companies - whether for use of your land, easements, crop damage, or disruption - the tax treatment depends on what the payment is actually compensating for, not just how the agreement describes it.
The resource or energy company is generally required to cover the cost of you obtaining independent tax and accounting advice as part of the compensation arrangement. There is usually no cost barrier to getting proper advice when negotiations are underway.
Talk to your advisor: If you’re receiving or negotiating a compensation payment from a resource or energy company, let us know. Check whether there is existing written advice or a Private Binding Ruling in place that gives you certainty on how the payments are treated.
If your group has service fees, licence fees, rent, or other charges flowing between related entities (e.g. between a trading company and a family trust), these arrangements should be supported by written agreements that reflect what is actually happening.
A recent Full Federal Court decision reinforced that informal arrangements - even where the payments have been made consistently for years - may not be enough to support a tax deduction.5 The Court held that there needs to be a clear, documented agreement between the parties, and that internal intentions or accounting entries alone are insufficient.
The practical test is straightforward: if the ATO asked you to show the written agreement behind any payment between your entities, could you produce one? If not, that’s probably something to address before 30 June.
Talk to your advisor: Review the arrangements between your related entities. If written agreements have expired or don’t exist, we can help you understand what you should happen.
If your family home is owned by a trust, the Queensland land tax principal place of residence exemption has strict requirements. Every beneficiary of the trust must occupy the property as their principal place of residence for the exemption to apply.
A 2025 Tribunal decision6 confirmed that even distributing income from other trust assets to a company is enough to void the exemption. Because the company received a distribution, it became a beneficiary of the trust. Because a company cannot “live” in a home, the trust failed the residency test - even though the company was specifically barred from having any interest in the property.
This is a state tax issue and specialist advice may be needed, but it’s worth being aware of when trust distributions are being decided.
Talk to your advisor: If a trust in your group owns a home in Queensland, consider the land tax implications of any trust distributions.
The theme for 30 June 2026 is getting the documents and details right. The ATO is increasingly focused on whether transactions are genuinely documented and reflect what actually happened. Resolutions need to be signed at the right time. Agreements between related parties should be documented.
If anything in this summary raises a question, now is a great time to discuss it. Tax planning meetings are the right place to work through these issues, and gives your advisor the best chance to put you in the strongest position before year-end.
1 Goldenville Family Trust v Commissioner of Taxation [2025] ARTA 1355; Commissioner of Taxation v Carter [2022] HCA 10.
5 Commissioner of Taxation v S.N.A Group Pty Ltd [2026] FCAFC 10
6 Wright v Commissioner of State Revenue [2025] QCAT 301.
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