What are some of the ATO's biggest challenges in 2025–26?
Technology and transparency are key. We're streamlining compliance and using data tools to support smarter, fairer outcomes. These tools are helping us to achieve pre-lodgment agreements about the tax treatment of significant transactions. This means businesses engaging early are avoiding potential post-lodgment tax disputes or shortfall penalties and interest.
Other challenges on the horizon include the integration of AI technologies across many industries. We're seeing these tools increasingly influence the Private Wealth sector. Both in how clients manage their businesses and how they approach their tax obligations.
Another focus area is our relationship with the tax profession. Stewardship and collaboration remain central to how we engage with the accounting and tax adviser community and it’s critical we continue to improve the effectiveness of our working relationships and maintain the public's trust in the tax system.
The commercial deals program plays a vital role in reinforcing this trust. Through every engagement, we provide tax assurance for Australia's largest commercial transactions across the Private Wealth market, building confidence with both clients and their advisers.
What are some risks you’re looking to address in 2026?
A key area of focus is foreign resident capital gains and asset dissipation risks. Our preference and focus is to take a cooperative approach to pre-deal completion and pre-lodgment compliance activities for commercial deals. However, in some high-risk situations, we may:
- issue a special or default assessment
- issue a garnishee notice
- apply for a freezing order
- take other action.
We're particularly concerned about the potential risk of either the:
- misapplication of the capital gains tax exemption for foreign residents and taxable Australian property
- dissipation of assets – such as the movement of funds outside Australia (for example, where a foreign resident is selling their sole Australian asset).
What are you personally looking forward to in 2026?
I'm looking forward to obtaining judicial guidance on ‘statutory severance’ and the meaning of real property in the context of Division 855 (non-resident access to CGT concessions). I expect that we'll be able to provide clearer guidance on this area of tax law in 2026.
I'm also anticipating improved certainty for foreign investors as a result of the Federal Budget 2024–25 government announcement that it will strengthen the integrity of the foreign resident capital gains tax (CGT) regimeExternal Link. This will more closely align the treatment of non-residents with the tax treatment that already applies to Australian residents.
There is also a range of exciting opportunities to leverage systems we’ve developed in Power BI, and other emerging technologies, to refine the way we operate and equip our decision makers with more effective tools and information systems.
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