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Private Groups Stewardship Group key messages 23 November 2022

Key topics discussed at the Private Groups Stewardship Group meeting 23 November 2022.

Last updated 5 January 2023

Action item update

20220607-2 – ATO to provide members with a draft communications plan for the planned release of guidance on the principles of revenue vs capital to review and provide feedback

Draft web-based examples dealing with the capital versus revenue distinction for the sale of small-scale land subdivisions were provided to members and feedback was sought. The action item has been closed.

20220901-1 – ATO to take steps to amend the Top 500 program statement of agreed principles

The revised ‘Agreed Principles Letter’ for the Top 500 engagements was circulated to members. The action item has been closed.

20220901-2 – ATO to convene a special purpose out of session PGSG meeting to continue the dialogue on tax governance for the Top 500 program

A special purpose out-of-session meeting was held with members. The action item has been closed.

20220901-3 – Members to consider their firms and/or networks to identify subject matter experts in Retirement villages to participate in a PGSG Sub-working group and send nominations to the ATO

The action item has been closed.

20220901-4 – ATO to provide members with a clearer view of Next 5,000 client experience survey results

An updated view of the Next 5,000 client experience survey results issued to members. The action item has been closed.

Environmental scan

The group discussed:

Members raised concerns about their recent experience in relation to ATO delays for processing private ruling applications, objection requests and lodgment deferrals. The ATO noted there are a number of reasons delays might be experienced.

Assistant Commissioner Kasey McFarlane observed that there had not been a noticeable trend in increasing delays in issuing private rulings but there had recently been some isolated cases where there had been a delay in allocating a private ruling application or gaps in information provided with the application had led to a delay.

Members were invited to provide examples in relation to objection request delays.

Co-chair Louise Clarke agreed to approach the ATO’s Service Delivery area to get an update on delays in prioritising deferrals. Post-meeting she was advised that the delays had been caused by a significant increase in enquiries concerning director identification numbers and staff had been diverted from processing deferrals to answering calls. The volume of calls has since reduced and Service Delivery are working on the backlog of deferrals.

Client to agent linking

Assistant Commissioner Kath Anderson provided an update on client to agent linking in online services.

  • The client to agent linking process will strengthen existing security controls to enable clients to better manage and control agent access to their tax and super affairs, and to ensure only authorised agents can access their client’s business accounts digitally.
  • Client to agent linking involves a new agent detail feature in Online services for business and a backend change to agent linking services in Online services for agents and practitioner lodgment service.
  • The solution involves clients submitting an agent nomination when they engage a new agent or change an existing agent’s authorisation. Once an agent has been nominated the agent can then add the client in Online services for agents or Standard Business Reporting enabled software.

Following a successful Phase 1, the ATO will be moving private group business taxpayers into the new client to agent linking process. Further consultation and communication will occur in the design and rollout to additional taxpayer groups.

Members noted the process will be challenging with existing myGovID access.

The ATO noted:

  • The initial process only relates to adding or changing a tax agent link for the first time and new agent links; it will not impact existing links.
  • It will implement a process to assist with bulk linking requests, including with clients that have multiple payroll providers
  • The period between the client nomination and processing client to agent linking is 7 business days.
  • It is developing support materials and contacting individual clients and tax professionals.

2023 Reportable tax position schedule instructions

Assistant Commissioner Michael Ingersoll and Assistant Commissioner Jenny Lin led a discussion on the 2023 reportable tax position (RTP) schedule instructions, including consultation on proposed changes to Category C questions, including:

  • proposed inclusion for 2 new questions
  • removal of question 18 on section 25-90 deductions
  • additional comments and sub-categories to questions 14 and 35
  • category change to practical compliance guideline (PCG) related questions
  • final instructions will be published on in December 2022.

The ATO is seeking members feedback on the proposed changes by 29 November 2022.

An overview of the ATO’s observations from the first year of private companies lodging an RTP schedule was provided. Most private companies who were notified of their requirement to lodge an RTP schedule have now lodged.

Private companies are now required to self-assess their RTP schedule lodgment obligations. The ATO will continue to adopt a practical approach if tax practitioners fail to identify a requirement to self-assess the RTP schedule lodgment obligation.

Members' comments

Members observed that the completion of the RTP schedule combined with assurance engagements can be a significant compliance cost for some taxpayers. The ATO noted careful consideration is given when adding a new question and it usually aligns with the release of a Taxpayer Alert or PCG.

Discussion occurred in relation to how information provided in completed RTP schedules by private companies is taken into account within ATO engagements.

Director identification

Assistant Commissioner Martin Jacobs and Director Robin Hayes provided an update to members on the progress of the director identification number (director ID) initiative. There is a significant marketing campaign underway to existing directors to apply before the 30 November 2022 application due date.

The key focus presently is on those directors who must apply by end November 2022.

The ATO noted:

  • There are approximately 200,000 new directors per year who must apply for their director ID before taking up their director responsibilities.
  • Digital-first is the preference for director ID applications, applying online is the fastest way to apply.
  • More than 1.5 million director IDs have issued, with 1 million plus directors yet to obtain their director ID.
  • ATO is prioritising follow-up with newly appointed directors, with 74% compliance.
  • Communications and stakeholder engagement will complement each other, however the ATO is looking at other channels to engage with directors.

Directors legal obligations

Australian Business Registry Services (ABRS) is contacting new directors who have not applied for their director ID within prescribed timeframesExternal Link. Agents of non-compliant directors are also being contacted to prompt their clients to apply. It is a criminal offence if directors do not apply on time and penalties may apply. Australian Security and Investments Commission is responsible for enforcing the director ID offencesExternal Link set out in the Corporations Act 2001.

Members' comments

A key challenge for the director ID initiative could be multiple mismatched names; for example, marriage, previous legal names and change in directors.

In future, and when the companies register transitions to the ABRS, directors will require a director ID to register on the Company register. Also at that time, as companies have an obligation to notify of changes to company detailsExternal Link, director IDs will be required for director appointments.

Members acknowledged difficulties faced for the ATO with Company data migration.

ATO noted that an additional call centre phone service will be available on Saturday, 26 November 2022.

See Statement from ABRS Registrar Chris Jordan on the director ID deadline released 30 November 2022.

Public advice and guidance

Assistant Commissioner Kasey Macfarlane presented an overview of topical advice and guidance products relevant to the private wealth market.

Following consultation with members, web guidance was published recently in relation to private company loan repayments arrangements and the application of section 109R of the Income Tax Assessment Act 1936, including an article in the Business bulletins newsroom.

For more information:

Kasey thanked members for their feedback on the draft guidance. The web guidance is intended to raise awareness on the operation of Division 7A in relation to back-to-back loan repayment and re-borrowing arrangements by a shareholder (or their associate) from a private company, providing education to agents and their clients.

Professional associations are encouraged to also raise awareness that section 109R applies to such arrangements. The ATO is considering more communication in 2023. Members’ feedback suggested there is a need for more specific technical guidance on some aspects of repayment and reborrowing arrangements. The ATO is considering the appropriate interpretative guidance that is required.

The ATO plans to publish web guidance in early 2023 about the characterisation of receipts as revenue or capital in relation to property development arrangements.

Kasey noted the ATO is seeing an increase in private rulings applications concerning testamentary trusts and the exercise of the Commissioner of Taxation’s discretion under section 99A(2). The ATO is interested to hear about Private Wealth market advisers’ experience with matters involving testamentary trusts and the section 99A(2) discretion.

Members noted there may be a need for public guidance to provide clarity and address uncertainties in relation to this issue.

Members noted the link to broader succession planning guidance from the ATO and would like succession planning to be discussed more broadly in the Private Groups Stewardship Group (PGSG) forward work program for 2023.

Status of worker

Deputy Commissioner Emma Rosenzweig led a discussion with members on draft public advice and guidance in relation to worker classification. Members were provided an embargoed copy of a draft PCG: Classifying workers as employees or independent contractors – ATO compliance approach as well as a new Taxation Ruling: Income tax: pay as you go withholding – who is an employee?

Determining whether a worker is an employee or an independent contractor is important to ensure that both the business and the worker get their tax, superannuation, ABN registration and reporting obligations right.

In February 2022 the High Court handed down decisions in CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (‘Personnel’) and ZG Operations v Jamsek [2022] HCA 2 (‘Jamsek’), which impacted ATO advice and guidance in relation to classifying workers.

The ATO has published a decision impact statement on these 2 cases. The ATO is reviewing our public advice and guidance products in order to make any necessary updates to reflect the principles set out by the High Court.

Further opportunity to provide feedback will occur when the drafts of initial revised products is released, which is expected to be December 2022.

Members' comments

It would be useful for the guidance to include examples of required evidence to show that both parties have understood the consequences of the contractual relationship. The ATO advised the guidance was intended not be prescriptive but will consider including examples of evidence.

Next 5,000 program – comprehensive risk reviews

Assistant Commissioner Amy James-Velagic led a discussion on the recently released Next 5,000 Findings Report and provided a recap on the refocused approach for the Next 5,000 tax performance program. The Next 5,000 program will be introducing comprehensive risk reviews into the program and consultation is occurring on the design of the comprehensive risk review process and experience including:

  • whether to include a notification period
  • what a notification period/process in a Next 5,000 comprehensive risk review may look like
  • developing the draft communication in commencement letters inviting clients to provide readily available information upfront and how this can result in earlier communication/transparency of the initial comprehensive risk review scope
  • the broader external communication of the introduction of comprehensive risk reviews into the program.

To support our refocused approach going forward, where the ATO has identified multiple potential risks or complex issues within a Next 5,000 private group, it may be more appropriate to assess and treat these risks under a comprehensive risk review rather than apply an assurance approach. The selection of these cases will be based on where our internal profiling or data analytics indicate that priority focus areas or tax risks may be present.

Feedback received from internal and external consultations in relation to the proposed client experience comprehensive risk review roadmap supports:

  • a one-month early notification period
  • an invitation to voluntarily provide readily available information in the notification letter
  • where readily available information is provided up front, the ATO case team is to provide the initial comprehensive risk review scope in the commencement letter/prior to the initial meeting (depending on the timing by which the information was provided).

Members' comments

  • There is value in the case team making phone contact at the time of the notification letter to build collaborative engagement from the beginning of the engagement.
  • There is value in holding the initial client meeting early so the client can provide readily available information and help the ATO engagement team understand roles of entities within the group.
  • Ongoing discussion and regular updates between the ATO engagement team and the tax agent or client is encouraged during the review, along with a process that is flexible to adapt to client needs.

Action item

20221123-2 – Next 5,000 program – Comprehensive Risk Reviews

Due date

Not applicable



Action item details

ATO to include the introduction of comprehensive risk reviews into the Next 5,000 Program on the PGSG forward work program in 2023, to discuss observations on how the new process is being received.

PGSG 2022 key achievements and 2023 forward work program

Members reflected on the key achievements of the PGSG this year and suggested potential key topics to include on the 2023 PGSG forward work program.

2022 key achievements

  • Section 100A consultation and Division 7A impacts
  • Finalisation of guidance on supporting the professional associations
  • Productive and ongoing discussions on Private Wealth’s programs of work, including Top 500 tax governance and Next 5,000 engagements
  • Topics presented and discussed provided a variety and balance of issues and opportunity for engagement

Members' comments

  • COVID-19 – The ATO quickly resumed its work program but did not allow for some businesses to fully recover.
  • Justified Trust programs present a high cost of compliance and can impact taxpayers.

2023 forward work program

  • Private Wealth Adviser program
  • ATO Digital Strategy
  • Continued discussions on Division 7A and section 109R impacts and proposed public advice and guidance
  • Ongoing discussions and updates on retirement villages project
  • Succession planning for private groups and family businesses


Attendees list




Louise Clarke (Co-chair), Private Wealth


Emma Rosenzweig, Superannuation and Employer Obligations


Kasey MacFarlane, Private Wealth


Jenny Lin, Private Wealth

CPA Australia

Elinor Kasapidis (Co-chair)

Deloitte Private

Michael Gastevich

Fox Private Group

Garry Voight

Greenwoods & Herbert Smith Freehills

Andrew White

Independent member

Paul Brassil

KPMG Australia

Belinda Cheesewright

Law Council of Australia

Angela Lee

Lowy Family Group

John Fanning

Oatley Family Group

Sharon Clark

PwC Private Clients

Michael Dean

The Tax Institute

Chris Wookey

7-Eleven Group

Kenny Cheong


Apologies list



Arnold Bloch Leibler

Paul Sokolowski

Chartered Accountants Australia and New Zealand

Michael Croker

Greenwoods & Herbert Smith Freehills

Andrew White