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Private Groups Stewardship Group key messages 8 June 2023

Key messages from Private Groups Stewardship Group meeting 8 June 2023.

Last updated 10 July 2023

Action item update

20221123-2 – ATO to include the introduction of Comprehensive Risk Reviews into the Next 5,000 Program on the Private Groups Stewardship Group (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 a future PGSG meeting.

20230308-01 – ATO to present information on the link between the Integrated Compliance and Private Wealth business lines within the ATO, including how respective private group tax avoidance, tax evasion or criminal behaviours are dealt with.

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

20230308-2 – Members will collate some experiences of their clients within 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 process.

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

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

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

Environmental scan

The group discussed observations and insights on current issues relevant to the privately owned wealthy group sector, including:

  • The 2023–24 Federal Budget – New measures impacting the ATO and Private Wealth market.
  • Corporate residency – The transitional period for foreign-incorporated companies as outlined in paragraph 104AA of Practical Compliance Guideline PCG 2018/9 Central management and control test of residency: identifying where a company's central management and control is located will continue until 30 June 2023. The transitional period will not be extended beyond this date.
  • The operational and business impact of interest rate rises, cost of living pressures and labour market shortages particularly impacting the tax industry.
  • Members raised concerns about their recent experience with ATO case teams referring complex technical matters to internal technical experts. This has led to delays in progressing the case, sometimes accompanied by a lack of communication back to the adviser.
  • Deputy Commissioner Louise Clarke advised that additional technical leads have been placed within case teams to create efficiencies between different areas. There is a focus within Private Wealth on training staff and building capability.
  • Members noted recent experiences with case teams undertaking extensive information gathering during taxpayer engagements with an apparent desire to ensure they are litigation ready. This appears contrary to exercising risk-based judgement or acknowledging the cost of compliance to the taxpayer.

Deputy Commissioner Hoa Wood noted that the ATO seeks to resolve issues as early as possible to avoid disputes and to ensure positions taken across cases are consistent. Louise Clarke noted that Private Wealth do not have a policy that all decisions must be litigation ready, but there are key audit cases that are identified for strategic litigation and we do aim to have them litigation ready.

Private Wealth focus for 2023–24

Louise Clarke and Hoa Wood provided an overview of Private Wealth’s planned focus areas for 2023–24, including:

  • expanded and new Tax Avoidance Taskforce (TAT) programs led by Private Wealth
  • recent changes in the Client Engagement Group (CEG) and what this means for Private Wealth and the private wealth market.

In the October 2022–23 Federal Budget, the government extended the TAT to 30 June 2026 and provided additional funding of $200 million per year over 4 years. This will enable the ATO to build on its ongoing focus on multinational enterprises and large public and private groups, as well as pursue new priority areas of observed tax risks.

As a result of the expansion and the increased need for the ATO to sharpen its organisational focus on fraud, changes have been made to the CEG structure to ensure we are best positioned to respond to the government’s additional investment in the ATO.

Most relevantly for the private wealth market, the Private Wealth business line is now led by 2 Deputy Commissioners (DC):

  • DC Louise Clarke, responsible for Private Wealth Client Experience
  • DC Hoa Wood, responsible for Private Wealth Behaviours of Concern.

Some programs from the former Integrated Compliance business line (Phoenix & Evasion Program, Complex Wealth Program, Promoters and Tax Exploitation Program and Complex Issues and Case Program) have transferred to Private Wealth Behaviours of Concern. We are currently settling how these programs will be run in the new structure.

Members' comments

Members queried whether the additional programs within Private Wealth Behaviours of Concern will change the experience for currently complying private wealth groups. Louise Clarke noted that the Private Wealth Client Experience programs will not change and the new structure will provide an opportunity to better manage cases end-to-end where private groups repeatedly display behaviour consistent with not wanting to engage with the tax system or comply with their tax obligations. These groups require tailored engagement. Hoa Wood advised that the Private Wealth Behaviours of Concern will also continue to have responsibility for small businesses that demonstrate evasion or phoenixing behaviours and treatment of promoters of tax exploitation schemes who operate across client experiences.

Members observed there is now a Private Wealth Adviser Program along with the Promoters program and queried the difference between them. The ATO noted that the Adviser Program will provide for a holistic understanding of the adviser population, implementing leveraged approaches ranging from prevention through education activities, through to correction, to drive future voluntary compliance. The Promoters program focusses on advisers presenting deliberate or tax exploitation behaviours. Both programs will focus on registered agents and other advisers.

Members requested an agenda item at the next PGSG meeting that provides an overarching view of the Private Wealth Adviser Program.

Action item


An overarching view of the Private Wealth Adviser Program

Due date

September 2023



Action item details

ATO to present information on the Private Wealth Adviser Program and how the program fits into the Private Wealth approach.

Top 500 program

Assistant Commissioner Scott Parkinson led a discussion on recent and forward-looking activities associated with the administration of Private Wealth’s Top 500 program. The recent focus has been on delivering commitments made in the 2022 Top 500 Program Findings report including:

  • Publication of practical web guidance around the implementation of effective tax governance across the 4 key principles.
  • The introduction of the streamlined approach to tax assurance and tax governance over the High Volume, Low Margin activities undertaken by Top 500 groups.
  • Focussing ATO teams on delivering differentiated experiences for groups who are actively engaging in the Top 500 program and those who are not.
  • Release of the guide to effective tax governance and the simplified pathway to Justified Trust for Top 500 groups whose income is derived predominantly from passive investment.
  • Upcoming release of the request for information template in relation to tax governance which will be designed to work in concert with published web guidance.

Members' comments

Members discussed the use of audited financial statements in the Top 500 assurance process.

Members provided observations on the guide for Top 500 private groups whose income is sourced predominantly from passive investment activity. This guide will be available on

Members offered to provide feedback on the tax governance request for information template prior to release, including governance requirements over asset classes not yet in the guide.

Members were interested in better understanding the benchmark for achieving justified trust as opposed to obtaining assurance.

Treatment of pre-lodgment disclosures for penalty purposes

Co-chair Elinor Kasapidis led a discussion on key aspects of the voluntary disclosure regime as it is administered in Private Wealth.

Members have observed an apparent lack of clarity about the communication, triage and decision-making approach to voluntary disclosures made by private groups and have experienced delays in voluntary disclosures being actioned. Members queried whether there would be follow up on voluntary disclosures that were sent to a voluntary disclosure mailbox prior to its closure. The ATO noted the observation and will investigate this further and report the findings back to members out of session. It was noted that delays could be part of a wider issue regarding processing backlogs within the ATO.

Members noted that Miscellaneous Taxation Ruling MT 2012/3 Administrative penalties: voluntary disclosures was unclear on when an ‘examination’ has commenced, particularly in relation to Top 500 or Next 5,000 assurance engagements which are not mentioned within the ruling. Discussion also occurred on disclosures made following pre-lodgment Commercial Deal engagements, but which were submitted after lodgment, and whether they met the classification of a voluntary disclosure.

Members also queried whether there were any limitations to the ‘approved form’ definition that prevents the ATO from receiving electronic submissions or other more efficient forms of communication.

The ATO will share this feedback with the MT 2012/3 ruling owner to consider providing additional clarity and examples in relation to the definitions of ‘approved form’ and ‘examination’.

Objection delays

DC Andrew Orme and Assistant Commissioner Daniel Nesci provided an update to members regarding the current management of Private Wealth and Integrated Compliance objections and the ongoing efforts to reduce the time it takes to decide objections. It was recognised that there was a significant increase in the number of objections received this financial year, in addition to a challenging recruitment environment, which has led to delays in progressing some objection cases. However, objection receipts have decreased over the last few months, which has enabled cases on hand to be brought back to more manageable levels. There are several measures the ATO are taking to address the overall increase in objection receipts, including implementing additional initiatives to build internal capability, recruiting additional staff with relevant skills and providing easier access to senior technical officers. There is also a focus on progressing aged objection matters.

The ATO noted external messaging is occurring to help lodgers of objections to also make the process more efficient, including ensuring all relevant information is provided to the ATO as early in the dispute process as possible.

Private Wealth GST targeted industry approaches

Assistant Commissioners Jenny Lin and Amy James-Velagic provided an overview of Private Wealth’s planned areas of focus for GST for 2023–24, which will include targeted approaches within the retail and construction industries. These represent 2 of the most significant industries in the Private Wealth market in relation to GST throughput and were both impacted by the COVID-19 pandemic.

Our focus will be on building a holistic understanding of how environmental changes and emerging business models in recent years may have impacted the GST risk landscape in these industries. This will help us to identify areas of risk, as well as opportunities to further support taxpayers to meet their ongoing GST obligations.

Additionally, the ATO is continuing with a broader review of the income tax and GST issues impacting retirement villages. Through consultation the ATO has developed a better understanding of this evolving industry, including how the increasing complexity in business models and various regulations may have a corresponding increase in complexity for application and interpretation of tax principles. A small number of GST integrated engagement cases have commenced and are in progress.

Members noted that sometimes the changing and evolving business models are driven by business decisions and not tax motivated.

It was also noted by members that retirement villages have been considered 'in focus' a number of times by the ATO, so any consideration of how the ATO can make it easier for industry to comply going forward would be welcome by the industry. The ATO confirmed that this is a key outcome being sought through this further review and the ATO is aware that while tax outcomes should not drive or impact commercial decisions, this industry is complex in relation to the various other 'non-tax' regulations and requirements.

Members observed that there may be indicators of increasing insolvency in the property and construction industry and whether this may impact the ATO’s ability to recover tax debt in those circumstances. The ATO confirmed that this is being monitored carefully.

Fraud and evasion

Kasey Macfarlane provided an update about proposed changes to the ATO’s administration of the fraud or evasion (period of review) exception. In particular, the ATO’s practice statement PSLA 2008/6 and associated guidelines will be updated to cover the following:

  • Taxpayers and their representatives will be made aware that fraud or evasion is a consideration prior to a matter being considered by the National Fraud or Evasion Advisory Panel (NFEAP), and prior to the issue of a position paper outlining contentions about fraud or evasion. It was noted that in exceptional circumstances a taxpayer and or their representative may not be informed that fraud or evasion is being considered in, for example, in the case of a covert audit, where there is a risk of evidence destruction or asset dissipation.
  • It will be mandatory for ATO case teams to seek further advice from the NFEAP where a material written response or submission is provided by or on behalf of a taxpayer in response to ATO contentions of fraud or evasion, for example, in response to a position paper.
  • The ATO will implement tailored training for all officers involved in considering and making recommendations about fraud or evasion.

Members noted that the ATO’s proposed changes are positive. There was discussion about the composition of membership of the NFEAP, with some members indicating a preference for external members. The ATO explained that when the panel is constituted members came from different areas of the ATO, and invariably there is at least 1 SES member. The ATO indicated that it planned to retain this approach to panel composition.

Income tax, Public advice and guidance

Christopher Ryan provided an update on the following advice and guidance products:

  • The Decision Impact Statement has been published for the Full Federal Court’s decision in Commissioner of Taxation v Guardian AIT Pty Ltd ATF Australian Investment Trust [2023] FCAFC 3.
  • It was noted that the Full Federal Court recently heard BBlood Enterprises Pty Ltd v CoT [2022] FCA 1112 (BBlood case). The ATO is proposing that any updates to Taxation Ruling TR 2022/4 be published after the Full Federal Court hands down its decision in BBlood.
  • The addendum to Taxation Determination TD 2012/22 Income tax: for the purposes of paragraph 97(1)(a) of the Income Tax Assessment Act 1936 is a beneficiary's share of the net income of a trust estate worked out by reference to the proportion of the income of the trust estate to which the beneficiary is presently entitled? has been published to take account of the decision in Lewski v Commissioner of Taxation [2017] FCAFC 145 (Lewski), and to make a minor clarification to Example 2. Christopher thanked members for the feedback received since the last PGSG meeting.

Kasey Macfarlane provided an update on other advice and guidance matters relevant to the Private Wealth market, including:

  • The ATO will publish a draft Taxation Determination to provide guidance about specific issues that commonly arise when considering if an entity is ‘controlled by’ another entity for the purposes of the Commissioner of Taxation’s discretion in subsection 328-125(6) of the Income Tax Assessment Act 1997.

PGSG members were recently invited to provide feedback on the proposed draft Taxation Determination prior to its planned issue at the end of June 2023.

  • The proposed guidance about section 99B of the Income Tax Assessment Act 1936 is planned to be in the form of practical guidance that will allow taxpayers and advisers to understand how the ATO will apply the provision across a range of factual scenarios.

Feedback and input will be sought from members about the range of scenarios and typologies that will be covered.

Other business

Redesign of

Louise Clarke noted the following:

  • The ATO is in the process of building a new website with improved navigation, search and design. We have conducted significant external engagement across all our client segments and worked closely with internal stakeholders to design the new website.
  • Delivery of the new website is scheduled for December 2023.
  • A presentation of the new website is proposed for the next PGSG meeting.

ATO website content update

Consultation content has been refreshed on the ATO website. The National Tax Liaison Group updated the ATO’s consultation framework in the spirit of continuous improvement and to ensure the ATO consultation are activities in line with ‘best practice’.

Content on medium and emerging private groups tax performance program has been updated. It now includes the types of engagement you can expect, refreshed demographics, and how to implement and maintain effective tax systems and reporting.


Attendees list




Louise Clarke (Co-Chair), Private Wealth Client Experience


Hoa Wood, Private Wealth Behaviours of Concern


Jenny Lin, Private Wealth


Kasey Macfarlane, Private Wealth

Arnold Bloch Leibler

Paul Sokolowski


Michael Anderson

Chartered Accountants Australia & New Zealand (CA ANZ)

Michael Croker

CPA Australia

Elinor Kasapidis (Co-Chair)

Deloitte Private

Priyanka Subramanyam


Michael Gastevich


Carlo Di Loreto

KPMG Australia

Belinda Cheesewright

Tax Bar Association

Daniel McInerney KC

The Tax Institute

Jonathan Ortner

William Buck

Tim Lyford

7- Eleven Group

Kenny Cheong


Apologies list




Emma Rosenzweig

Fox Private Groups

Garry Voigt

Law Council of Australia

Tuan Van Le

PwC Private Clients

Michael Dean

Spotlight Group Holdings

Leah Edwards