With Winter now upon us, it’s time to embrace the joys of the cooler months of the year.
Now that the federal election is out of the way, and another financial year is drawing to a close, it’s a perfect time to look back at all you’ve achieved over the past 12 months and focus on a fresh start for the financial year to come.
While market volatility continued, markets largely recovered from April’s losses in May. However, the legal and economic uncertainty of US tariffs remain a key concern for global and local markets.
The end of the month saw the S&P/ASX 200 react positively at first to the news that a US federal judge had blocked the tariffs. When an appeals court temporarily stayed the tariffs hours later, a mini sell-off followed. The index has jumpstarted its way to a three-month high, not quite back to its best in February.
There was a sigh of relief all round when the Reserve Bank lowered interest rates in May by 25 basis points to 3.85%. The RBA’s move came with a caveat that, while domestic demand “appears” to be recovering and real household incomes have picked up, the outlook is unclear because of both local and international developments.
Inflation was slightly higher than expected for the 12 months to April, but it remained within the RBA’s target range and many economists are predicting another rate cut in July.
In this issue
Smart moves before the financial year ends
Tax update June 2025
How the $3m super tax may affect you (and what to do next)
Smart moves before the financial year ends
The end of the financial year is an opportunity to optimise your financial strategy, take advantage of tax deductions, and set yourself up for the new financial year.
Whether you’re looking to maximise tax benefits, rebalance your investment portfolio, or to simply ensure you’re ticking all the right boxes, smart end of financial year (EOFY) planning can make a big difference.
So, to finish the financial year on a high note, start by mapping out your finances and investment portfolio and collect all the relevant documents. It can be a tedious task if your filing isn’t up to scratch, so it can be useful to set up a system as you go to make it easier for the next financial year.
You will need your bank statements, superannuation fund statement, self- managed super fund (SMSF) paperwork if relevant, a record of any capital gains or losses from the sale of assets such as shares or property, details of share dividends including any dividends earned through a Distribution Reinvestment Plan, and records of any other investments or income received.
Looking for deductions
On the other side of the ledger, there are limits on deductions for most categories of expenses but it’s a useful exercise to gather the evidence of all costs associated with employment and income-producing investments – whether or not they’re tax deductible.
For the most part at least, some deductions are allowed for certain work-related costs, donations over $2 to approved not-for-profits, the costs of managing your tax affairs, eligible investment property expenses, income protection insurance premiums (if the premiums are paid outside of your super fund), and expenses linked to a financial investment – such as attending a seminar directly related to the investment or the cost of account keeping fees on bank accounts used only for investment.i
The ATO is keeping a close eye on work-related expenses and working from home deductions this year, saying there must be “a close connection to your income earning activities, and you should be prepared to back it up with records like a receipt or invoice”.ii
Get ahead with early payments
One way of maximising deductions in this financial year is by paying early deductible expenses due next year such as insurance premiums, subscriptions, or business rent if applicable. But remember to check first to see which expenses may be eligible to prepay.
Small businesses also have access to an instant asset write-off for the business portion of assets under $20,000, that were purchased and used in this financial year. The instant asset write-off is available to businesses with an annual turnover of less than $10 million.iii
Review your portfolio
At this stage of the year, it’s a good time to take stock of your investments including shares, superannuation and property. You may want to check that your investment strategy is still appropriate for your needs and expectations and review any underperforming assets.
The review will help you to decide whether you have an opportunity to top-up your super fund or SMSF. If you have funds to spare, making the most of the total contribution amount allowed both in this financial year and for the last five years, could give your retirement planning a serious boost.
It’s also a chance to review super indexation changes due from 1 July to see if there’s a need to take action before 30 June or to wait. For example, the amount that can be transferred into the retirement phase (known as the general transfer balance cap) will increase to $2 million on 1 July, up from $1.9 million this financial year. That might affect the decision to begin a pension this month as opposed to next.
There’s a lot to consider right now to make sure you’re optimising tax savings and that your planning today leads to a financial reward tomorrow. Give us a call if we can help.
i Deductions you can claim | Australian Taxation Office
ii ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
iii Instant asset write-off for eligible businesses | Australian Taxation Office
Tax update June 2025
ATO individual and business priorities
The Australian Tax Office will be cracking down on work-related expenses in personal tax returns this year after recently revealing some of the claims that have been submitted in the past.
The ATO is also reminding businesses of this year’s limit for the popular instant asset write-off and its ongoing focus on GST fraud.
Here’s a roundup of the latest tax news.
‘Wild’ deduction claims
The tax office caused some raised eyebrows with its revelations about ‘wild’ work-related expense claims made by some taxpayers, including a mechanic claiming an air fryer, TV, gaming console and microwave.i
Other claims deemed to be personal rather than work-related included a truck driver claiming swimwear so he could go for a swim when stopped for a break, and a fashion industry manager claiming over $10,000 in luxury-branded clothing that was purchased to wear to work functions.
This time the ATO says it intends to focus on common taxpayer errors, such as work-related expenses, working from home deductions, and income from multiple sources (including side hustles like ride sourcing services or selling services via an app).
Instant asset write-off limit
The ATO is reminding taxpayers who purchased business assets during the financial year that the instant asset write-off limit in 2024-25 is $20,000.ii
The instant write-off (which allows you to immediately deduct the business part of the cost of eligible assets) is available to businesses with an aggregate annual turnover of less than $10 million who use the simplified depreciation rules.iii
The full cost of eligible depreciating assets (both new and second-hand) costing less than $20,000 on a per asset basis, may qualify for the deduction.
Focus on business GST fraud continues
A Melbourne man has been sentenced to 2 years and 11 months’ imprisonment after obtaining over $390,000 in fraudulent GST refunds and attempting to obtain a further $330,000.
The sentence reflects the continued ATO focus on stamping out GST fraud, with the acting deputy commissioner Kath Anderson noting there were “no ifs, ands or buts here – if you don’t run a business, you don’t need an ABN and you cannot claim GST refunds”.
The ATO-led Serious Financial Crime Taskforce remains on the lookout for potentially fraudulent GST activities, with information sharing identifying businesses using complex financial arrangements (such as false invoicing, misaligned GST accounting methods and claims for fake purchases) to obtain larger GST refunds.
New small business benchmarks released
Small business owners keen to take the ‘pulse’ of their business can now use updated financial benchmarks covering 100 different industries produced by the ATO.
Updated annually, the benchmarks are designed to help business owners compare their performance against other businesses in the same industry.
Owners can use the information to identify if their performance is within the normal range for their industry, which mean it is less likely to attract ATO attention.iv
Paperless SMSF reporting
The ATO has emailed trustees of SMSFs still completing and lodging paper activity statements encouraging them to move to paperless reporting for improved security and convenience.
The regulator says benefits of paperless reporting include an additional two weeks on the fund’s lodgment deadline, reduced errors, faster refunds and easier recordkeeping.
In line with the push for greater digital SMSF reporting, the ATO recently noted non-lodgment of SMSF annual returns remains a concern and this can result in trustee penalties and removal of a fund’s compliance status.v
Estimates of illegal early access in SMSFs is also worrying the regulator, with prohibited loans from funds increasing.
Help with compromised TFNs
With identity theft continuing to increase, the ATO has updated its information for taxpayers who find their tax file number (TFN) has been compromised.
TFNs can be comprised through a number of different channels like email or phishing scams, or through data breaches at legitimate organisations as well as ID theft by criminals.
Anyone who believes their TFN has been compromised or used illegally should contact the ATO immediately on 1800 467 033.
i ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
ii Instant asset write-off for eligible businesses | Australian Taxation Office
iii Simpler depreciation rules for small business | Australian Taxation Office
iv ATO releases new small business benchmarks for 100 industries | Australian Taxation Office
v Highlights from the 2025 SMSFA conference | Australian Taxation Office
How the $3m super tax may affect you (and what to do next)
As the federal government moves to introduce a new 15 per cent tax on superannuation earnings above $3 million (known as Division 296 tax), concerns and debates have emerged about the broader implications for investment strategies, retirement planning, and even the property market.
It is intended that once passed by Parliament, the new tax – which doubles the tax rate from 15 per cent to 30 per cent for balances that exceed $3 million – will apply from July 1, 2025.
The tax change is expected to directly affect less than 0.5 per cent of investors or around 80,000 people.i
Treasurer Jim Chalmers describes the increase as “a modest change” that will make “concessional treatment for people with very large superannuation balances still concessional but a little bit less so”.ii
He says it will help fund other priorities such as Medicare, cost-of-living relief and tax cuts.
The Grattan Institute says tax breaks on super contributions cost the federal budget nearly $50 billion in lost revenue each year.iii
The Institute says that, while super is intended to help fund retirement, it has become a “taxpayer-subsided inheritance scheme”. By 2060, Treasury expects one-third of super withdrawals to be as bequests – up from one-fifth today.
How will the rate be calculated?
The formula for the additional tax payment due calculates the difference between the member’s total superannuation balance for the current and previous financial years and adjusts for net contributions (which excludes contributions tax paid by the fund on behalf of the member) and withdrawals.
An earnings loss in a financial year, can be carried forward to reduce the tax liability in future years.
The calculation of earnings includes all unrealised gains and losses.
Implications for investors
The Grattan Institute says taxing capital gains as they increase removes incentives to “lock in” investments. “But it can create cash flow problems for some self-managed super fund (SMSF) members who hold assets such as business premises or a farm in their fund,” the Institute says.iv
Many commentators speculate there will be a major change to asset allocation in super, particularly in SMSFs, as a result of the move to tax unrealised gains.
Meanwhile, one property analyst predicts a structural shift in property investment with commercial real estate becoming more attractive because of its stronger income yields relative to capital growth.v
The new tax could also reduce the appeal of super as an inheritance tool with investors likely to explore alternative wealth transfer methods.
Navigating the changes
With the tax changes looming, we’re helping clients to ensure their portfolios will continue to meet their expectations.
For those looking to minimise their exposure to the tax, there are a number of strategies that may be useful.
These include:
Diversifying investments outside of superannuation by, for example, making direct investments in equities, bonds or private businesses.
Considering alternative retirement savings vehicles such as family trusts.
Actively planning to optimise tax efficiency by, for example, structured withdrawals to keep balances below the $3 million threshold, making use of tax exemptions and considering asset reallocation.
The new tax marks a significant shift in Australia’s retirement savings landscape. While the government argues that the measure is modest and targeted, its long-term implications—particularly the taxation of unrealised gains—could reshape investment strategies for high-net-worth investors.
For those nearing retirement with a high super balance, careful financial planning will be essential and all investors who could potentially be affected, should be reassessing their portfolios and weighing up whether alternate wealth management strategies may be an option.
Please get in touch if you would like help to navigate the changes.
i Better targeted superannuation concessions – factsheet (PDF)
ii Interview with Michelle Grattan, Politics podcast, The Conversation | Treasury Ministers
iii, iv Tax reform will make super fairer and the budget stronger – Grattan Institute
v $3 million superannuation tax change sparks property warning as ‘panic’ selling begins
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This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.
Authorised Representative No. 1243642 and Bottrell Wealth Pty Ltd is Corporate Authorised Representative No. 1243427 of InterPrac Financial Planning Pty Ltd (AFSL 246638).