Action item update
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Action item |
20241119-2 Valuation of Employee Share Schemes (ESS) |
|---|---|
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Description |
ATO to consider the application of the valuation guidelines in ESS 2015/1 (and whether amendments are required) to companies issuing shares that qualify for the start-up concession where the relevant company issuing shares is the head company of a group of entities. |
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Responsibility |
ATO |
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Status |
Closed Pending the new legislative instrument for the start-up concession coming into effect, there is a team working on additional web guidance on this issue. |
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Action item |
20250319-2 Private Equity |
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Description |
ATO to consider opportunities for additional public advice and guidance in relation to private equity and arrange an out-of-session discussion on potential topics. |
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Responsibility |
ATO |
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Status |
Open We are continuing to progress our private equity program of work, including consideration of new Public Advice and Guidance (PAG). Once the program matures and reaches a suitable stage for discussing potential PAG topics, we intend to arrange an out-of-session discussion or include an item for discussion at a future PGSG meeting. |
Environmental scan
ATO corporate plan
The ATO corporate plan 2025–26 was released on 8 August 2025. It highlights 4 key activities that are significant programs or areas of work which will be a high priority. The corporate plan also outlines 5 enterprise priorities which are strategically important, aimed to improve results against the ATO's key activities and core business functions over the short term.
Consultation on ATO approach to taxpayer relief provisions
The ATO has been reviewing its decision-making approach for several lodgment and payment related discretions which are concessionary in nature. On 4 September, the ATO published for public consultation, proposed principles for making these decisions to assist taxpayers and their representatives understand how the ATO will make future decisions.
Modernisation of tax administration program
Following the changes introduced to the Trust Tax Return in Tax Time 2024, the government announced in their 2024–25 mid-year economic and fiscal outlook statement it will provide funding to deliver the next phase of the modernisation of tax administration program.
Consultation with tax professionals and industry organisations will occur over the coming months to prepare for the changes and seek feedback on the proposed approaches.
An update is scheduled for the November Private Groups Stewardship Group (PGSG) meeting and the ATO will seek feedback on how to best prepare trustees, beneficiaries and tax professionals for the next raft of changes being introduced in Tax Time 2026.
Recent public advice and guidance
Members discussed recent public advice and guidance impacting the private wealth market, including:
- Taxation Ruling TR 2004/18 Income tax: capital gains: application of CGT event K6 (about pre-CGT shares and pre-CGT trust interests) in section 104-230 of the Income Tax Assessment Act 1997.
- Taxpayer Alert TA 2025/2 Arrangements designed to improperly obtain goods and services tax refunds.
- Taxation Determination TD 2025/5 Income tax: disregarding certain payments under section 109R of the Income Tax Assessment Act 1936 in determining how much of a loan has been repaid in situations where notional loans are involved.
- Practical Compliance Guideline PCG 2025/2 Restructures and the new thin capitalisation and debt deduction creation rules – ATO compliance approach.
Recent litigation
Members discussed recent litigation impacting the private wealth market, including:
- Merchant & Anor v Federal Commissioner of Taxation
- Commissioner of Taxation v Ierna and others
Top 500 program
The ATO provided an update on the Top 500 program and discussed the key findings for the 2024–25 year as well as some key insights from the client survey.
An area for improvement that was highlighted in the client survey results is the response to timeframes around requests for information (RFI).
Members queried whether this survey response related to the 28-day response requirement for a RFI. The ATO explained that it was and that a portion of the survey population were in an audit or review which tends to be accompanied by a stricter requirement to abide by the 28-day time frame due to the limited period of review. A member commented that in their experience the ATO is supportive in providing an extension of time for an RFI and that they have positive interactions when requesting an extension.
The ATO acknowledged the program survey was conducted just before tax time which was not ideal and assured members that consideration would be given to when the next survey would be conducted. Future iterations of the survey will also have more specific questions relevant to the type of interaction, for example, engagement or review/audit that the group is involved in.
Following program changes that came into effect in April 2024, the ATO confirmed that the majority, if not all Top 500 groups eligible to exit the program, will occur in the 2025–26 financial year. The ATO advised that several groups that were eligible to exit the program had opted to remain, many of whom had invested in tax governance and were already in, or close to achieving, justified trust.
Members asked if the ATO is seeing a rise in the use of artificial intelligence (AI) to produce tax governance frameworks.
The ATO advised it has not been seen in tax governance documentation but has been seen in responses to queries. Members asked if the ATO had an internal view about the use of AI. The ATO responded it does not have an issue with the use of AI but expected human review of material produced with the assistance of AI before it is finalised.
Private groups focus areas for 2025–26
The ATO provided an update on the development of key risk focus areas for 2025–26 for the privately owned and wealthy groups (POWG) client experience.
Members discussed a draft of the refreshed web content planned for release and noted the upcoming 23 September webinar.
Members queried who the intended audience for the web guidance is. We advised it is intended to be targeted at both private groups and their advisers, with a particular focus on reaching the lower end of the POWG market.
Members agreed that highlighting areas of focus was beneficial as it allows advisers to raise the focus areas with their clients.
Members queried whether retaining the 45-day holding period rule as a focus area for 2025–26 meant that there would be further activity. The ATO noted that it is seeing this issue arise more frequently in cases, so it will continue to be a focus area, with some guidance expected to be published shortly.
Members and the ATO confirmed that the focus areas for the year are largely a continuation of last year's topics with a small number of additional areas.
Small business independent review pilot
The ATO’s Small Business Independent Review (SBIR) service has been undertaking a trial expansion into the POWG segment for eligible businesses with aggregated turnover of between $10 million and $50 million.
Independent review is a pre-assessment merits review designed to bring a fresh set of eyes to an audit dispute, focusing on the areas of disagreement between the parties.
Eligible taxpayers receive an offer at the completion of an audit to undertake an SBIR. In the 2025 financial year, the trial expansion received 29 requests for SBIR and completed 20 reviews.
The ATO is gathering feedback and evaluating the trial expansion, which runs to 31 December 2025. This evaluation, and feedback from stakeholders will inform our consideration of post-trial options.
Members commended the process as it allows for taxpayer to feel heard and gives them a forum to better understand the ATO position.
It was noted that small business taxpayers with research and development claims made up a higher proportion of the SBIR due to the potential that if the research and development claims are not approved, the cost may be substantial and cause the taxpayer to enter administration.
Members also noted that when seeking feedback from taxpayers about the SBIR, it would be better if it's done at the conclusion of any review as taxpayers may be concerned that any feedback provided during the SBIR could negatively impact the outcome.
Draft PCG: back-to-back CGT rollovers
Members participated in a confidential discussion and provided feedback on the proposed draft practical compliance guideline (PCG) that the ATO is developing on this topic. The ATO will incorporate this feedback in progressing the PCG, including reviewing the language and nuance in the examples.
Property and construction topical issues
Property and construction are a key industry within the privately owned and wealthy group population, therefore the ATO will continue to have a focus on helping taxpayers and their advisers get it right, while also ensuring a level playing field.
In June 2024, the ATO consulted with the PGSG in relation to 3 topical issues for expanded web content, which has now been published. We are now considering the further topical issues which have been included on our what attracts our attention, property and construction web content since August 2022.
We are seeking members insights and feedback on ATO observed examples and scenarios in relation to related party developments to help deepen our understanding for consideration of potential further guidance.
Members discussed the different scenarios, commercial drivers and arrangements. Feedback was provided on the importance of any guidance being clear on the difference in features between contrived and commercial. Members noted that guidance would be useful if the ATO is observing high risk contrived and artificial arrangements.
Agent authorisation process for individuals and sole traders
The ATO is currently undertaking consultation on an agent authorisation solution suitable for individuals and sole traders.
We have been engaging with a diverse group of representatives including:
- tax practitioners
- professional association representatives
- digital service providers
- groups of individuals and sole traders to provide input and feedback.
Additional industry sectors and groups will be invited to provide their input and feedback as the consultation proceeds.
The next stages of consultation will include testing and discussions addressing support options, communications and the delivery plan.
Members queried if the tax agent authorisation process would apply to all individuals and sole traders and if it could be run through myGov.
The ATO advised that using myGov may be part of the solution and that the process will apply to all individuals and sole traders but only in circumstances where they are seeking to change their tax agent.
The ATO highlighted the feedback received from individuals and sole traders has been positive as they want to have control of who can access their information.
Members commented that whichever mechanism is used, the ATO should be mindful of those groups of people who won't or can't access technology and may require additional support.
The ATO agreed and advised consideration on how to support these groups will occur at the next stage of the consultation process.
Next 5,000 program
Next 5,000 program updates have been made in respect of streamlined assurance review (SAR) and next action review products discussed at the 24 July 2025 PGSG. The changes have been implemented as part of improving taxpayer experience. The specific updates are:
- changes published to ato.gov.au in September 2025
- changes implemented about ATO processes and systems for new SARs commenced from September 2025.
The ATO discussed a further change to processes regarding a one-month notification period for comprehensive risk reviews. Instead of being locked to provide a particular amount of time for notification, staff will work with tax agents and taxpayers on what way is most appropriate to start a review. For example, allow some time for agents and taxpayers to prepare, have a meeting first to better understand the group, obtain financial statements to best tailor our questions we ask, issues a request for information. This change means there will be a similar experience for private groups that are subject to a review across different populations.
Members questioned whether a notification letter is issued when a client has entered the Next 5,000 population. The ATO advised that such a letter is not issued. Notification letters are issued prior to a review commencing.
The Next 5,000 program has communicated the ATO's concerns about non-lodgment in the privately owned wealthy group population through articles published on the tax professional's newsletter and business bulletin newsletter in August 2025.
The Next 5,000 program issued a program experience survey in June 2025 to tax agents to draw additional insights for the Next 5,000 program focusing on tax governance, SAR notification period, findings report and external communications to assist with shaping the Next 5,000 program going forward.
Technical updates
Following the decision of PepsiCo, members and ATO discussed the potential upcoming changes that may be seen in the market relating to Part IVA cases.
Members were informed of consultation to be held between PGSG members, ATO and Treasury surrounding family trust distributions tax on 24 September 2025.
Attendees
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Organisation |
Member |
|---|---|
|
ATO |
Louise Clarke (Co-chair), Private Wealth |
|
ATO |
David Mendoza, Individuals and Intermediaries |
|
ATO |
Jenny Lin, Private Wealth |
|
ATO |
Kasey Macfarlane, Private Wealth |
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Accru Felsers |
Brett Cox |
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Alvarez & Marsal |
Dang Kha |
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BDO |
Michael Anderson |
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Buildcorp Group |
Jeff Jones |
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Chartered Accountants Australia and New Zealand |
Karen Liew |
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CPA Australia |
Jenny Wong |
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EY |
Priyanka Subramanyam |
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HLB Mann Judd |
Gaurav Chitnis |
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John Fairfax Group |
Rob Jackson |
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KPMG |
Belinda Cheesewright |
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Law Council of Australia |
Tuan Van Le |
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Moore Australia |
Varun Kumar |
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Mutual Trust |
George Psarrakos |
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Oatley Family Group |
Sharon Clark |
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Piper Alderman |
Megan Bishop |
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Tax Bar Association |
James Strong |
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The Tax Institute |
Jonathan Ortner (Co-chair) |
|
William Buck |
Tim Lyford |
Guest attendees
Guest attendees list
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Organisation |
Attendee |
|---|---|
|
ATO |
Amy James-Velagic, Private Wealth |
|
ATO |
Adrian Zuccarini, Office of the Chief Tax Counsel |
|
ATO |
Alexa Olczyk, Private Wealth |
|
ATO |
Amanda Priestley, Private Wealth |
|
ATO |
Celeste Salem, Private Wealth |
|
ATO |
Daniel Nesci, Objections and Review |
|
ATO |
Deborah Boyd, Office of the Chief Tax Counsel |
|
ATO |
Glenn Cooper, Private Wealth |
|
ATO |
Helen Filinis, Private Wealth |
|
ATO |
Pei-Sheng Hsu, Private Wealth |
|
ATO |
Pri Wijesooriya, Private Wealth |
|
ATO |
Priyasheel Jalota, Private Wealth |
|
ATO |
Tanya Richards, Office of the Chief Tax Counsel |
|
ATO |
Tara McLachlan, Private Wealth |
|
ATO |
Vesna Circosta, Private Wealth |
|
ATO |
Ziva White, Individuals and Intermediaries |
Apologies list
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Organisation |
Member |
|---|---|
|
ATO |
Rowan Fox, Individuals and Intermediaries |
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Pitcher Partners |
Alexis Kokkinos |
|
Workpac |
Rachel Tyler |