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Private Groups Stewardship Group key messages 18 September 2023

Key topics discussed at the Private Groups Stewardship Group meeting 18 September 2023.

Published 25 October 2023

Membership changes

Deputy Commissioner Louise Clarke announced recent Private Groups Stewardship Group (PGSG) membership changes:

  • Elinor Kasapidis resigned as a member and the external co-chair, effective 18 September 2023.
  • Bill Leung replaces Elinor Kasapidis as the CPA Australia member.
  • Jonathon Ortner, representing The Tax Institute, will be the new external co-chair.
  • Paul Sokolowski, representing Arnold Bloch Leibler, resigned as a member. His last meeting was on 8 June 2023.

Action item update

20221123-2 – The inclusion of comprehensive risk reviews in the Next 5,000 program to be put on the PGSG forward work program in 2023, to discuss observations on how the new process is being received.

This item is in progress and will be discussed at the next meeting.

20230308-2 – Members will collate experiences of their clients in the Top 500 assurance program and/or Next 5,000 risk-based engagements and bring them to the PGSG as examples to help improve the private group experience and refine ATO processes.

This item is in progress. Members’ feedback will be discussed out-of-session and be completed by the next meeting.

20230308-4 – Members to bring early engagement discussion back to the PGSG.

This item will be discussed at a future meeting. Assistant Commissioner Kasey Macfarlane advised that data is being collated and the matter is in progress.

220309-04 – ATO to provide members with updates on progress of Section 99B draft guidance.

This item is in progress and will be discussed at the next meeting.

20230608-1 – An overarching view of the Private Wealth Adviser program.

This item can be closed, it was discussed at this PGSG meeting.

Environmental scan

Members discussed current issues relevant to the Private Wealth (PW) market.

ATO corporate plan 2023–24

On 27 July 2023, the ATO corporate plan 2023-24 was released.

Areas of ATO activity which may be of interest to the PW market include:

  • continued focus on multinational tax performance
  • protecting the system and clients against fraud including cybersecurity
  • addressing collectable debt
  • continuing to invest in data and digital.

Members suggested that a stronger ATO senior leadership presence in groups like the Cyber Security Stakeholder Group would promote the continued need for engagement with industry on issues of cybersecurity and fraud.

Proposed changes to promoter penalty laws and other reforms

On 8 August 2023, the Australian Government announced a package of proposed reformsExternal Link. The package covers 3 priority areas:

  • strengthening the integrity of the tax system, including changes to the promoter penalty laws
  • increasing the power of regulators, including changes to tax secrecy laws and enabling referrals of ethical misconduct by advisers to professional associations for disciplinary action
  • consulting to develop targeted and effective options for strengthening regulatory arrangements for advisory firms.

Members expressed interest in being involved in consultation on the promoter penalty laws to better understand what the reforms will mean for the industry.

Cessation of the Modernising Business Registers program

On 28 August 2023, the Government announced the cessation of the Modernising Business Registers programExternal Link.

Final independent Review of the Modernising Business Registers Program (PDF 23,038KB)This link will download a file

The Tax Institute summit

Commissioner of Taxation Chris Jordan made his final address to The Tax Institute summit on 6 September 2023.

Integrity declarations

Elinor Kasapidis provided an update on the consultation process for the ATO integrity declaration. Co-chairs from various stewardship groups have participated in consultation. The integrity declaration will be issued to members shortly.

Members discussed how the integrity declaration might interact with their professional obligations and governance factors.

Client-to-agent linking

The agent nomination process is a new requirement that ensures only authorised representatives can access client accounts and act on a client's behalf. The process applies when a client changes their tax agent or changes the authorisations of their existing tax agent. The agent nomination process will apply to all types of businesses with an Australian business number, excluding sole traders, effective from 13 November 2023.

Members welcomed the new client-to-agent linking process as an initiative that will strengthen confidence in how tax agents access client information held by the ATO. There was discussion on general data integrity and cybersecurity and the potential use of third-party data conduits.

Members' comments

Members discussed the ongoing challenge of attracting and retaining new tax professionals. While there continues to be a lower uptake of commerce and accounting degrees through higher education, opportunities exist to attract professionals with transferable analytical skills from other disciplines.

Members raised the issue of ATO case officers being reluctant to engage in-person. Members acknowledged the flexible work environment has impacted the way the ATO engages and suggested there is a need for greater transparency on ATO engagement protocols.

PW Adviser Strategy

Assistant Commissioner Jenny Lin shared a broad overview of the Tax Avoidance Taskforce PW Adviser Strategy. The strategy focuses on the influence advisers have on their clients, and the role they play in driving voluntary compliance and improving tax performance.

Discussion covered the strategy's objectives; advisers in scope of the strategy; current focus areas, including the best practice principles developed by the 4 largest tax advisory firms; and connection points with other ATO programs.

Members' comments

Members queried the difference between the Private Wealth (PW) and Individual and Intermediaries (IAI) programs of work. Members also queried whether legal practitioners, financial advisers, and migration agents were integrated into the risk modelling to cover a broader adviser population. The ATO clarified that the scope is much wider than what IAI has traditionally focused on. There is already a lot of data on hand to identify the broad range of advisers that influence PW clients.

Members queried whether there is a regulatory obligation to comply with the program and expressed concern about ATO overreach into the Tax Practitioners Board's (TPB) areas of responsibility. The ATO advised it will focus on tax compliance and any conduct breaching the Tax Agent Services Act 2009 or Code of professional conduct will be referred to the TPB as per the normal process.

There was discussion about the large market tax adviser principles being extended to second tier firms. Members queried the value of firms signing onto the principles, considering proposed law reform and heightened governance. The ATO advised it is in a scoping phase. The principles provide an opportunity for second tier firms to positively promote their current governance processes. Members suggested the ATO collaborate with other regulatory bodies to develop a single set of agreed principles

International tax in the PW market

Assistant Commissioner Karen Price provided an overview of the PW international program.

The main topics covered in the discussion included:

  • program overview
  • existing risk clusters, including related party financing and intangible migration
  • emerging focus areas, including poor compliance with the controlled foreign companies rules and mischaracterisation of service arrangements
  • targeted international risk campaigns focused on
    • international dealings schedule non-lodgment
    • arm’s length debt test
    • non-resident interest withholding tax
    • non-resident royalty withholding tax
  • recent international public advice and guidance (PAG) updates relevant to the PW population
  • proposed new international tax measures and the potential impact on PW taxpayers
    • amendments to thin capitalisation
    • OECD Pillar Two
  • significant global entity (SGE) compliance.

Members' comments

Members discussed web guidance on financing arrangements and what the ATO might consider low-risk and high-risk, particularly in the property and construction industry. Members suggested the guidance is difficult to understand. Members were encouraged to seek private advice on financing arrangements, particularly those utilising complex debt or equity structuring. It was suggested this topic could be raised at the Property and Construction Stakeholder Relationship Forum on 19 October 2023.

Members suggested a ‘what’s new’ section in media releases and bulletins would make it easier for advisers to be alerted to more nuanced changes and issues. It would be particularly useful for smaller advisory firms and for those managing legacy and complex client relationships.

Members discussed challenges in managing governance related to intangibles for start-up businesses, especially when expanding into overseas markets.

Members raised concerns about corporate residency, particularly in single director groups. It is becoming increasingly complex to maintain governance structures across groups that operate in both the domestic and overseas markets. Members commented that the draft PCG on corporate residency is only relevant in a practical sense to public groups. Most, if not all, foreign subsidiaries of Australian private groups fall in the medium or high-risk zone under the PCG. Louise Clarke advised consideration will be given to whether additional guidance is required for the PW market.

There was discussion on the shift in penalty remissions for SGE’s, particularly the time required to obtain advice from the ATO and the varying interpretations of Practice Statement Law Administration PS LA 2011/19 Administration of the penalty for failure to lodge on time

Action item


Due date

Early 2024



Action item details

An out-of-session discussion on issues raised around corporate residency and intangible migration.

Better Targeted Superannuation Concessions

Assistant Commissioner Naomi Westwood provided an update on the Better Targeted Superannuation Concessions measure announced on 28 February 2023 and confirmed in the 2023–24 Budget on 9 May 2023. The policy parameters for this measure are still being finalised.

The change is intended to improve the equity and sustainability of the superannuation system by reducing the tax concessions available to individuals with a total superannuation balance exceeding $3 million at the end of the financial year.

On 31 March 2023 Treasury released a consultation paper, inviting interested stakeholders to provide feedback. Treasury have also led working groups to work through certain aspects of the measure, such as the formula for calculating earnings on an individual’s total superannuation balance over $3 million, reporting requirements for the superannuation industry, and issues relating to the treatment of defined benefit interests.

Once policy parameters are known, the ATO would like to engage with external stakeholders to understand impacts on individuals, funds, and tax professionals.

Members’ comments

Members welcomed the opportunity to provide feedback and look forward to consultation. Members were interested to know whether the new measure is still intended to apply to unrealised gains.

Members asked when the draft legislation will be released for consultation. The ATO advised it will reach out to industry for formal consultation next year. Further technical details associated with the measure will be circulated through the exposure draft.

Introduction to Payday Super

Assistant Commissioner Naomi Westwood provided an update on the upcoming changes to the frequency of superannuation payments from 1 July 2026 and sought feedback from members on potential impacts or concerns.

On 9 May 2023 as part of 2023–24 Budget, the government announced the Securing Australians’ Superannuation package. The package will commence from 1 July 2026.

The purpose of the package is to ensure employees have greater visibility over whether their entitlements have been paid and better enable the ATO to recover unpaid superannuation.

In addition to the Payday Super measure, the announcement highlighted:

  • changes to the design of the superannuation guarantee (SG) charge to align with increased payment frequency
  • improvements to ATO data matching capabilities to identify and act on cases of SG underpayment by employers
  • consultation and co-design by the ATO and Treasury.

Treasury will lead the policy consultation period and a consultation paper is expected to issue soon.

The project director encouraged members to continue to provide feedback through consultation groups.

Members’ comments

Members expressed appreciation for the timely and inclusive consultation process run by the ATO on this measure. They also advised there are still some cashflow issues around small business superannuation clearing house and discussed the Single Touch Payroll concessions made for closely held payees.

Tax and digital futures

Assistant Commissioner Michael Morton provided members with an overview of the Improve small business tax performance pilots.

The Improve small business tax performance team has commissioned a series of pilots focusing on opportunity areas to drive improved tax performance. Pilots are testing a series of hypotheses and determining the viability of changes to the frequency or process associated with businesses meeting their tax obligations.

  • The right time GST payments pilot is testing whether more frequent GST payments will assist small businesses to better manage their cashflow and prevent future debt.
  • The monthly GST and PAYG withholding reporting pilot is testing whether monthly GST and/or PAYG withholding reporting will assist small businesses to better provision for their GST and PAYG withholding obligations, improving their cashflow management and preventing new/future debt.
  • The guidance in software (building confidence and certainty into natural systems) pilot is testing whether integrating advice and guidance into digital systems via prompts and nudges will support the early detection of issues and errors, potentially reducing the tax gap.

Members' comments

Members queried the use of nudges within pilots and their intended use in case processes. Presenters explained nudges are intended to help clients make better compliance decisions. They are not intended as a tool to identify non-compliance. Further consultation will be conducted through the pilot process.

There was discussion around the use of digital service provider data and broader data integrity considerations. Presenters reiterated the ongoing balance of being a data-driven agency while working with data providers and clients to ensure information security.

Members welcomed the opportunity to consult further through the pilots.

Modernisation of Trust Administration Systems

Assistant Commissioner Christopher Ryan provided an overview of the Modernisation of Trust Administration Systems (MTAS) project consultation plan.

The MTAS project is an ATO-wide strategy to improve the quality, accuracy and integrity of annual tax return information reported by trustees and beneficiaries.

The project will deliver improvements to the lodgment experience for trustees and beneficiaries and provide them with greater support to meet their reporting obligations.

The project will also improve:

  • the administration and processing of trust reporting obligations
  • the ATO’s data driven decision-making process, including those which inform compliance and assurance activities.

The project will initially see changes implemented in time for Tax Time 2024. It will impact the lodgment of income tax returns for the 2023–24 financial year for all trusts and beneficiaries. These changes will focus on form changes and reporting.

In delivering the project, the ATO will improve the client experience and ATO data use by:

  • simplifying reporting obligations for clients
  • improving the lodgment experience for clients
  • automating the processing of trust returns
  • ensuring trust return reporting is complete and accurate
  • improving data matching through the better use of data the ATO already collects and holds
  • increasing community confidence in the integrity of the tax system.

In addition to the PGSG, the project team has engaged with the Tax Practitioner Stewardship Group (TPSG), digital service providers, tax agents, and trustees and beneficiaries, through targeted consultation forums. The project team will continue to engage with stakeholders to support ongoing problem definition, future project design and the successful implementation of project elements.

Members’ comments

Members queried how additional data will impact the ATO’s strategy for trust compliance. Presenters explained the project is not designed to collect additional data. Rather, it collects data in a different manner. The change will simplify trust reporting for beneficiaries of trusts and their registered agents. The ATO will use the data to better target its compliance activities. For example, contact from the ATO is triggered if a taxpayer makes an inadvertent reporting error by including assessable income at the incorrect label. The project will improve correct reporting and reduce the likelihood that taxpayers are subject to this type of unnecessary review activity.

Members suggested consultation should include a variety of professional associations so they can prepare for any additional Tax Time 2024 lodgment obligations. Presenters explained they do not expect taxpayers or their agents will be subject to additional reporting obligations. The information to be collected is the same as what is already collected, but in a simplified format with improved fields to capture specific data.

Louise Clarke suggested an action item to provide the TPSG with an overview of the communication strategy for the MTAS in due course.

Action item


Due date

Early 2024



Action item details

ATO to provide overview of the communication strategy planned for the MATS to the TPSG.

Income tax public advice and guidance

Kasey Macfarlane provided an update on advice and guidance matters relevant to the PW market.

Section 99B ITAA

The ATO anticipates the release of draft guidance on section 99B of Income Tax Assessment Act 1936 (ITAA) the early next year. This will be a draft PCG focused on scenarios involving offshore trusts and the more common issues that arise in that context. The proposed scenarios will be discussed at the November PGSG meeting and feedback sought from members.

Section 100A ITAA

The final addendum to TR 2022/4 Income tax: section 100A reimbursement agreements will be published shortly. The addendum provides updates to the ruling to reflect the decisions in Guardian FCAFC and BBlood FCAFC. A draft version of the addendum was previously circulated to members for comment.

Central management and control test of residency

A draft update to PCG 2018/9 was recently issued for public consultation. The ATO is continuing to engage with stakeholders in relation to feedback provided. The ATO welcomes any further feedback from the private wealth market.

Capital allowances – composite items

Draft Taxation Ruling TR 2017/D1 was published in 2017. An updated draft ruling will be published in early October 2023. The principles and approach reflected in the updated draft remain consistent with the current draft ruling. The ATO decided to issue the update in draft given it is some time since TR 2017/D1 was published.

Division 7A – undue hardship - corporate trustees

The ATO's Advice under development flags a proposed draft Taxation Determination on whether a corporate trustee can suffer undue hardship for the purposes of subsection 109G(4) of the IATAA. The ATO is considering addressing this issue through web guidance instead of a draft Determination. Members advised it would be useful to have web guidance; however, it is sometimes difficult to track the changes made through that medium.

Earnout arrangements

Draft Taxation Ruling TR 2007/D10 was withdrawn in 2016. However, the withdrawal notice states taxpayers can continue to rely on the withdrawn draft ruling where look-through provisions in subdivision 118-I of the ITAA do not apply. The ATO is considering updating the withdrawal notice to remove this reference to continued reliance on TR 2007/D10. Guidance about the tax consequences of earnout arrangements is addressed on Members expressed reservations about the proposed update to the withdrawal notice and suggested further guidance is required about when the look-through provisions in subdivision 118-I apply.

Section 109CA ITAA

The ATO sees a range of instances where assets owned by private companies, such as luxury boats and cars, are used for private purposes by shareholders and their associates. The ATO is considering the scope and application of section 109CA in Division 7A in this context. Members discussed their insights and experiences.

Back-to-back capital gains tax rollovers

The ATO is considering issues that arise in the context of back-to-back capital gains tax rollovers with a view to developing guidance. The proposed guidance will extend beyond the scope of what is currently on ATO Advice under development. Members are interested to understand the ATO’s position as it develops and welcome further discussion.

Other business

Louise Clarke noted 2 September agenda items will be postponed to the November meeting:

  • research and development transparency measures
  • new project.






Louise Clarke (Co-chair), Private Wealth


Usha Narain, Superannuation & Employer Obligations


Jenny Lin, Private Wealth


Kasey Macfarlane, Private Wealth


Michael Anderson

Chartered Accountants Australia and New Zealand

Michael Croker

CPA Australia

Elinor Kasapidis (Co-chair)

CPA Australia

Bill Leung

Deloitte Private

Priyanka Subramanyam


Michael Gastevich

Fox Private Group

Garry Voigt

Law Council of Australia

Tuan Van Le

PwC Private Clients

Michael Dean

The Tax Institute

Jonathan Ortner

William Buck

Tim Lyford

7-Eleven Group

Kenny Cheong


Guest attendees




Angela Hucker, Private Wealth


Caryn Kaluzinski, Superannuation and Employer Obligations


Christopher Ryan, Private Wealth


James de Clifford, Private Wealth


Karen Price, Private Wealth


Kelly Norwood, Small Business


Leanne Downham, Superannuation and Employer Obligations


Michael Morton, Small Business


Naomi Westwood, Superannuation and Employer Obligations


Nicholas Bell, Private Wealth


Sahika Jafari, Private Wealth






Emma Rosenzweig, Superannuation and Employer Obligations


Carlo Di Loreto


Belinda Cheesewright

Oatley Family Group

Sharon Clark

Spotlight Group Holdings

Leah Edwards