Practice Update - December 2020

Improvements to be made to full expensing measure

The Government has announced it will expand eligibility for the temporary full expensing of depreciating assets measure, which temporarily allows certain businesses to deduct the full cost of eligible depreciable assets in the year they are first used or installed.

As part of the 2020/21 Budget announcements, businesses with a turnover of up to $5 billion would be able to immediately deduct the full cost of eligible depreciable assets as long as they are first used or installed by 30 June 2022.

Now the Government will also allow businesses to opt out of temporary full expensing and the backing business investment incentive on an asset - by - asset basis.

This change will provide businesses with more flexibility in respect of these measures, removing a potential disincentive for them to take advantage of these incentives. This may be relevant where the automatic application of full expensing might cause the entity to make a loss

JobMaker Hiring Credit legislation has passed

The Government has now passed legislation to establish the JobMaker Hiring Credit, which is part of the Government's economic response to the COVID-19 pandemic. The JobMaker Hiring Credit is specifically designed to encourage businesses to take on additional young employees and increase employment.

It does this by providing employers with a fixed amount, paid quarterly in arrears by the ATO, of:

$200 per week for an eligible employee aged 16 to 29 years; and
$100 per week for an eligible employee aged 30 to 35 years.

To be eligible, the employee must have been receiving JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months, assessed on the date of employment. Employees also need to have worked for a minimum of 20 hours per week of paid work to be eligible, averaged over a quarter, and can only be eligible with one employer at a time.

The hiring credit is not available to an employer who does not increase their headcount and payroll. Employers and employees will be prohibited from entering into contrived schemes (for example, by laying-off staff and re-hiring them) in order to gain access to or increase the amount payable.

Existing rights and safeguards for employees under the Fair Work Act will continue to apply, including protection from unfair dismissal and the full range of general protections.

ATO Visa Data Matching Program

The ATO will acquire visa data from the Department of Home Affairs for 2020/21 through to 2022/23, relating to approximately 10 million individuals for each financial year.

The data will be used to identify non-compliance with obligations under taxation and superannuation laws, including registration, lodgement, reporting and payment responsibilities.

STP data-sharing with Services Australia

Single Touch Payroll ( STP ) allows the ATO to share data in real-time with other government agencies, to "help them deliver government services to the Australian community".

As part of the ATO's data-matching program, it has a STP data-sharing arrangement with Services Australia to help them administer Australia's welfare system.

This means that people who are on an income support payment from Services Australia and need to report their employment income fortnightly to Centrelink will now see their employer details are pre-filled.

Proposed FBT exemption - retraining and reskilling

The Government has announced it will introduce an exemption from FBT for retraining and reskilling benefits provided by employers to redundant, or soon to be redundant, employees where the benefits may not be related to their current employment.

It is proposed that this FBT exemption will not apply to :

retraining provided under a salary packaging arrangement;
training provided through Commonwealth supported places at universities; or
repayments towards Commonwealth student loans.

If enacted, this proposed measure is intended to apply from the day it was announced, which was 2 October 2020.

We note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information's applicability to their particular circumstances.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

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Tax Alert - High Court decision and ATO statement on Bendel’s Case

July 7, 2026

High Court decision and ATO statement on Bendel’s Case The High Court recently handed down its decision in Bendel’s Case, confirming that an unpaid present entitlement (or UPE) between a discretionary trust and a beneficiary company does not fall within the extended definition of a “loan” for Division 7A purposes. The Australian Taxation Office released a Decision Impact Statement in response to the High Court findings, concluding the High Court's reasoning makes it clear that where a beneficiary company is entitled to a share of trust income that remains unpaid (a UPE) and the company takes no positive actions to call for payment of the entitlement, this will not fall within the expanded definition of a "loan" for Division 7A purposes. This is in contradiction to the ATO’s historical position that treated UPEs as "loans".

Practice Update – July 2026

July 5, 2026

Government's tax reform package The Government has recently legislated several of the tax reform measures announced in the 2026 Federal Budget (and in later media releases). These include, among other things: Replacing the CGT discount with cost base indexation and a 30% minimum tax on gains accruing from 1 July 2027 (including gains on pre-CGT assets); Increasing the small business turnover threshold for the 50% active asset reduction from $2 million to $10 million; Limiting negative gearing for residential property to new residential dwellings from 1 July 2027 (subject to transitional rules); and Introducing the Working Australians Tax Offset from 1 July 2027, and the $1,000 instant tax deduction for work-related expenses from 1 July 2026. After a round of consultation, the Government has also announced further proposed measures, broadly including (among others): A new targeted CGT discount for investors in innovative start-ups; Barring SMSFs from utilising future limited recourse borrowing arrangements ( LRBAs ) to acquire residential property; and Exempting income of discretionary testamentary trusts from the minimum tax proposed for trusts. We recently released a Tax Alert considering the legislation restricting SMSFFs using residential property LRBAs – to read click here . For full details of each of the 2026 Federal Budget announcements, please see our Federal Budget Tax Alert – to read click here .

Tax Alert - Legislation restricting SMSFs using residential property LRBAs has now passed Parliament

June 28, 2026

Legislation restricting SMSFs using residential property LRBAs has now passed Parliament The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 ( the Reform No 1 Bill ) was passed by Parliament on Thursday 25 June 2026. Schedule 5 of the Reform No 1 Bill amends section 67A of the Superannuation Industry (Supervision) Act 1993 to restrict future limited recourse borrowing arrangements ( LRBAs ) on real property to investments in “business real property” (as defined in section 66 of the SIS Act). Residential property of any kind is excluded from the definition of “business real property” in section 66 of the SIS Act. We note this also excludes newly constructed residential property, which is a distinction at odds with recent exemptions being given to new-builds with other Budget Night tax changes relating to negative gearing and restricting the CGT 50% discount. Super funds are not generally allowed to borrow for investments, but there has been a concession allowing a self-managed super fund ( SMSF ) to borrow money to buy single assets like property, if their loans were set up in line with particular requirements, known as LRBAs. This change means an SMSF will not be able to borrow to buy residential property after the start date of these changes.