Read Advisory BAN TACS Accountants Mackay

Expats Be Aware!

Thanks to the very generous Askbantacser who allowed their Q&A to be published. Gives you an idea of how much tax the government will collect if you sell your home while living overseas. No main residence exemption at all and not even a reset of the cost base to market value when first rented out.
The simple solution is to move back to Australia to live before you sell.

https://taxquestions.com.au/lose-so-much-when-sell-home-while-a-non-resident-for-tax-purposes/

Monday Money Talk with Noel Whittaker

Last week was Scams Awareness Week. The figures are frightening: Australians reported 91,767 scams in the first six months of this year, with a massive $156.6 million stolen. Most of that money will never be recovered.
Someone who knows the problem well is billionaire Andrew “Twiggy” Forrest, who has spent over $60 million fighting Meta over scam advertisements circulating on Meta platforms using his name and image to promote bogus investments. The issue became very personal when his father rang to complain about Forrest’s latest “initiative”. His friends had piled in and lost their money. Forrest was horrified; he had nothing to do with it.
And this is not new. Scammers have been using Twiggy’s likeness in thousands of deceptive advertisements since 2019. He is now pursuing Meta through the US courts, arguing that the social media giant should be held accountable for scam advertisements appearing on its platforms. Meta denies wrongdoing.
But it’s not just Twiggy. A parade of well-known Australians, from Gina Rinehart to Kochie, have supposedly been endorsing fabulous investment opportunities online. All of them are fake.
Most of these scams are on Facebook, and they are becoming more sophisticated by the day. Just last week a startling headline appeared online: “Jacqui Lambie arrested at ABC Ultimo,” complete with a convincing photograph of Senator Lambie apparently being held by police.
But that was only the beginning. The fake story included a remarkably realistic account of an alleged confrontation on ABC’s Insiders between Lambie and Angus Taylor. She supposedly accused him of being a silvertail, hopelessly out of touch with ordinary Australians, while Taylor was portrayed as trying to stop her revealing an investment opportunity that could make ordinary people wealthy.
It looked like a genuine news story. It had well-known politicians, a respected television program, photographs, and a plausible political argument. But the whole thing was a beautifully constructed fiction. The sting was waiting at the bottom: to discover the investment Lambie supposedly did not want you to miss, simply click on the link. Just to make sure, I rang the senator’s office. They told me they had been bombarded with calls since the fake story appeared on Facebook.
That is the scammer’s first objective: get your attention and start a conversation. Once the conversation begins, the real work starts.
An 87-year-old retiree saw an advertisement promising big returns from trading silver and clicked on the link. A well-spoken man contacted him, patiently explained how it all worked and convinced him everything was legitimate. There was just one suggestion: move his banking from Westpac to ING, because ING was supposedly “much easier to deal with”. He did. Once the change was made, the scammer moved in. The man’s entire superannuation disappeared.
Then there is the 50-year-old single woman in California who met her dream man on a dating app. He was handsome, attentive and rang every day. He asked all the right questions and seemed genuinely interested in her life. In her words, “He seemed like the perfect partner.” The relationship continued for six months. He claimed to live in Chicago, but despite their regular phone calls they didn’t meet – he said they should get to know each other better before he made the long trip to see her.
Early in the relationship he casually mentioned that he worked in sales and traded cryptocurrency as a hobby. Nothing serious, he said – just the occasional small bet. Eventually he suggested she try it herself, starting with just $50 through a crypto trading website he recommended. The profits appeared almost immediately.
That was the hook. She gradually invested more and watched her supposed balance grow beyond anything she had imagined. Eventually he persuaded her to put all her savings into crypto. At the rate her investment was growing, she would soon have enough to pay off her mortgage.
You can guess what happened next: the money disappeared, the relationship ended, and her dream man vanished. The impressive trading website was an almost perfect copy of a genuine crypto site. There had never been any investments or any profits. The boyfriend, the romance and the fortune on the screen were all fictions. Her money was the only thing that had been real.
Scammers are relentless. A mortgage broker told me about a retired couple, both on the full age pension, who already had two mortgages secured against different properties. They borrowed more money for what they believed would be a short-term cryptocurrency investment. Before long, their “trader” delivered the wonderful news that their investment had quadrupled. Naturally, they decided it was time to take their profits.
That was when the alarm bells finally rang. The trader told them they had made so much money that the ATO had assessed capital gains tax of nearly $50,000 – and their investment could not be released until they paid the $50,000 to him, so he could pass it on to the ATO. Fortunately, they contacted their accountant before sending another cent. He immediately knew something was wrong. The fabulous profits disappeared; the trader disappeared; and the whole house of cards came crashing down.
The lesson is simple. The scammers don’t need to fool everybody all the time — they just need to fool you once. Never, ever invest because of something you see on social media, never transfer money on the instructions of a stranger, and never be rushed. If the opportunity is genuine, it will still be there tomorrow.

Great example of how difficult it can be to keep repairs deductible. Thanks to the generous askbantacser who allowed their Q&A to be published.

https://taxquestions.com.au/too-much-improvement-and-no-repair/

If the budget wasn't enough to scare you out of buying an investment property have a read of what this poor landlord went through and then to be denied a tax deduction for most of the repairs!

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/AATA/2022/3094.html

The latest on Home Prices

Interesting figures from Cotality Australia the median house price in Melbourne is only $786,718 yet we are being told house prices are unaffordable so the government must introduce more taxes on owning a house. Also note that first home buyers, in the last year, using the governments 5% deposit scheme have now lost their equity in Sydney and Melbourne.
If this tax grab was intended to help young people get a home why have sales volume dropped by 20%? And the bottom line, is where are the people who cannot afford to buy a home going to live. Shortage of Landlords means rent increases.

https://www.abc.net.au/news/2026-09-01/property-prices-downturn-accelerates/107098796

Monday Money Talk with Noel Whittaker

It's now more than three months since the May Budget was handed down, and the fallout continues unabated. This legislation reminds me of an architect under pressure to get a building up in a hurry: the design is poor, construction rushed, and the cracks appear almost immediately. Treasury has been racing around with the toolbox, patching one crack after another. The trouble is that every time it fixes one problem, another appears somewhere else. This isn't sensible tax reform; it's emergency maintenance on legislation that should never have left the drawing board.
The first example is testamentary trusts. These are trusts created under your will, so an inheritance can be managed for a beneficiary rather than simply handed to them.
Take a family with four children and a $4 million estate. The eldest son is a builder, the second a gambler, the daughter is in a rocky marriage, and the youngest is sixteen. Hand each $1 million and imagine the possibilities. The builder goes broke and his creditors take the lot. The gambler does what gamblers do. The daughter's marriage collapses and a large chunk disappears with the departing husband. And nobody in their right mind would hand $1 million outright to a sixteen-year-old.
The solution has always been to establish four testamentary trusts. The money is still there for the children; it simply has protection. As estate-planning lawyer Rachael Rofe puts it: "A testamentary trust is not a tax dodge. It is a set of protective walls around an inheritance."
Then Treasury came along with its new 30% minimum tax on discretionary trusts. The Budget exempted existing testamentary trusts, but a testamentary trust doesn't normally exist until somebody dies. You may have a perfectly valid will containing testamentary trusts, but if you were still alive on Budget night, those trusts didn't yet exist and could therefore be caught.
There was an immediate uproar: estate-planning specialists pointed out that these trusts aren’t elaborate tax dodges but long-established structures designed primarily to protect beneficiaries. Treasury suggested people could use fixed trusts instead, but this misses the point: it’s their flexibility that makes discretionary testamentary trusts so useful.
So out came the repairs toolbox: Treasury announced an exemption from the proposed 30% minimum tax on discretionary trust income for testamentary trusts. One crack has been patched, but there are plenty more appearing.
And it’s unfinished business. This exemption has been announced by Treasury but has not yet appeared in legislation. As always with tax reform, the announcement is the easy part. The legislation is where you find out what devils are hiding in the detail.
What the latest exposure draft does do is give testamentary trusts, along with deceased estates, an exemption from the proposed 30% minimum tax on capital gains. The less good news is that two obvious problems – what happens when assets transfer on death or divorce without a sale – have been identified but left for another day.
The new CGT regime starts on 1 July 2027. It replaces the general 50% CGT discount for individuals and trusts with cost-base indexation and introduces a 30% minimum tax on capital gains. For assets already owned, the gain is divided between the periods before and after 1 July 2027, with any resulting liability deferred until a later realisation event.
The problem comes when an asset changes hands without being sold – commonly from a deceased estate to a beneficiary or between separating spouses. Nobody has cashed out, yet the transfer can trigger the deferred gain, and the tax on it. Treasury agrees that shouldn't happen, as no money has changed hands, but has left the fix to yet another tranche of amendments.
Strangely, the same problem has already been dealt with under the proposed negative gearing rules. A surviving spouse, co-owner or family-law transferee can inherit the previous owner's status and retain the negative gearing exemption. The principle has therefore been accepted in one part of the legislation but not yet dealt with in the CGT provisions.
Under the draft, qualifying capital gains attributed to an individual beneficiary of a testamentary trust or deceased estate won't automatically be pushed up to the new 30% minimum tax rate. Broadly, the concession applies to assets coming from the deceased estate and investments derived from them, not from unrelated family assets subsequently dumped into the trust.
But who sells, and when, can now carry a significant tax cost. Rofe puts it neatly: "The concession is real, but it is fragile." Sell inside the estate and the concession can apply; hand the asset over first and it may be lost.
That makes estate planning more important, not less. Rofe says wills containing testamentary trusts should be reviewed, where possible, because the tax rules around them have moved dramatically. Her point is particularly important for older wills: the structures may still work perfectly well, but they were drafted for a different tax regime.
And then there's record-keeping. Under the proposed continuity rules, a beneficiary receiving an asset in specie will generally be treated as having acquired it when the deceased did. Executors may therefore need records of purchase, improvements and previous rollovers going back decades; a valuation at death will most likely no longer be enough. So keep the paperwork.
Where does this leave us? Testamentary trusts already provide valuable protection for beneficiaries, and they will secure an important CGT concession when the legislation amendment passes. But whether an asset is sold inside an estate or trust, or distributed first and sold later, will become much more important.
Government has acknowledged that these problems exist and promised that the legislative tools will arrive later. We are left to wait and see what will actually be delivered.

Noel Whittaker is the author of Retirement Made Simple, Wills Death and Taxes and numerous other books on personal finance. Email: [email protected]

Ex-ATO boss Chris Jordan named by KPMG whistleblower Former tax commissioner Chris Jordan is accused of receiving more than $1 million in "secret commissions" during his time at KPMG in the 1990s, according to documents seen by the ABC.

Newsflash 398 out now!

Another long list of warnings about problems with the poorly written budget.

https://www.bantacs.com.au/wp-content/uploads/2026/08/Newsflash-398.pdf

Monday Money Talk with Noel Whittaker

Superannuation has suddenly become everybody’s favourite pot of money.
Last month Prime Minister Anthony Albanese said there was “real potential” to see our super funds as “a national asset” that could produce better returns not just for individuals and retirees, but “for the nation”. That immediately raises the question: whose money is it? Pauline Hanson has come at it from the opposite direction: “It is their money.” With Australians struggling with mortgages and the cost of living, she believes the rules should be loosened so people can get their hands on more of their super when they need it.
Then there’s the Liberal Party. Opposition Leader Angus Taylor leads a party that has already advocated letting Australians use their super to help buy a home. On television last Monday night he went further: “It’s the people’s money. They should be able to do what they like with it.” And then, almost inevitably, the aptly named Senator Andrew Bragg weighed in, declaring superannuation one of the biggest public policy failures since Federation.
So now we have three very different approaches to the same $4.5 trillion pot of money. The Prime Minister sees it as a national asset. Pauline Hanson wants people to have greater access to it. The Liberals say it’s the people’s money and they should be able to decide what to do with it. It’s a debate worth having, because behind all the politics lies one fundamental question: whose money is your superannuation?
To answer that, let’s go back to the architect of our modern superannuation system, former Prime Minister Paul Keating. He once told me: “I wanted an Australia where every worker would have money put away for their retirement, professionally managed so they could benefit from compound interest, and protected until they reached preservation age.” It was a simple idea, but its impact has been profound.
In the early 1990s compulsory employer super started at just 3%. Over the years it was gradually increased, with the final step to 12% reached only last year. It was hardly a smooth journey. There were repeated attempts to stall the increases and, at one stage, enormous pressure to freeze the guarantee at 9%. Fortunately, the system survived, and millions of Australians are better off because it did.
I’ll never forget an email I received from a 66-year-old woman. “I have no home, and my only asset is $250,000 in super. How will I cope in retirement?” I explained that at 67 she would qualify for an indexed age pension of around $30,000 a year for life and could also draw about $18,000 a year from her super – enough to last until at least 90. Her reply said it all: “Thank you. You’ve put my mind at rest.” For people like her, super means choices, dignity and independence.
Critics of compulsory super have always argued that workers would be better off getting the money now instead of having it locked away for decades. It sounds attractive, but it ignores one basic fact: human nature. People adapt their spending to whatever lands in their bank account. They don’t miss the 12% going into super any more than they miss the tax withheld from their wages. But they certainly notice that money when they retire.
Take a 40-year-old earning $55,000 a year who already has $100,000 in super. Their employer contributes $6,600 a year. If that money were paid as wages instead, tax would take 30% and the rest would almost certainly disappear into everyday spending. Without compulsory super, much of that money would simply vanish over a lifetime, leaving the age pension to do far more of the heavy lifting.
Now leave the money in super. Assume wages rise by 3% a year and the fund earns an average 8%, and by 65 our worker could have around $1.3 million in super. Of course, $1.3 million in 25 years won’t buy what $1.3 million buys today. At 2.5% inflation, it would be worth roughly $700,000 in today’s money. But that’s still $700,000 of retirement wealth that probably would never have existed.
And that is the genius of compulsory super: it happens automatically. The money is invested before it can be spent, compound interest is given decades to work its magic, and people who may never have thought of themselves as investors can reach retirement owning a substantial portfolio.
There are, however, two ways super can sensibly be used to help people into their first home without simply turning it into an ATM.
The first was the Liberal proposal to allow first-home buyers to take up to 40% of their super, capped at $50,000, to help with a deposit. The important part was that the money was not simply gone forever. When the home was eventually sold, the amount withdrawn would be returned to super, together with a share of the capital gain. In other words, it gave young people a leg up into the housing market while protecting their retirement savings.
The other is the existing First Home Super Saver Scheme. This works differently. Prospective first-home buyers make extra voluntary contributions to super, taking advantage of its concessional tax treatment, and can later withdraw eligible contributions plus associated earnings to help fund their deposit. Up to $15,000 of eligible contributions from any one financial year can count towards the scheme, with a maximum of $50,000 available for release, plus associated earnings.
The crucial thing about these proposals is that they do not simply raid the compulsory super put away for retirement. One effectively lends them some of their super to buy a home and requires it to be restored later; the other uses super as a tax-effective vehicle to build a deposit. Both preserve the basic principle of keeping super to fund retirement. That’s very different from opening up everybody’s super whenever money gets tight.
That’s why we should be very careful when politicians start eyeing that $4.5 trillion pot. It may be called a national asset. It may be tempting to raid it for housing, mortgages or today’s cost-of-living pressures. But Keating’s original principle remains the right one: superannuation is the worker’s money, put aside for one purpose – to give them a better retirement.
Once we start treating it as money for anything else, we risk destroying the very thing that made it work. Superannuation is more than economic policy. It’s a social contract. It asks people to give up a little today so they can have much more tomorrow. And its great strength is beautifully simple: it happens automatically.

Noel Whittaker is the author of Retirement Made Simple, Wills Death and Taxes and numerous other books on personal finance. Email: [email protected]

I wonder has Anthony Albanese considered how his new tax laws affect him? Afterall that Copacabana house cannot be covered by his main residence exemption.

https://www.bantacs.com.au/Jblog/death-tax-may-see-jodi-homeless/ -2150