Diagnostic Accounting

𝗪𝗛𝗬 𝗬𝗢𝗨𝗥 𝗕𝗘𝗦𝗧 𝗖𝗔𝗦𝗛 𝗠𝗢𝗡𝗧𝗛 𝗜𝗦 𝗡𝗢𝗧 𝗬𝗢𝗨𝗥 𝗕𝗘𝗦𝗧 𝗜𝗡𝗖𝗢𝗠𝗘 𝗠𝗢𝗡𝗧𝗛

A gym signs up a wave of annual memberships in January and the bank balance jumps. It feels like the strongest month of the year. For tax, most of that money has not been earned yet, and treating it as if it has can create a problem later.

𝗖𝗮𝘀𝗵 𝗶𝗻 𝘁𝗵𝗲 𝗯𝗮𝗻𝗸 𝗶𝘀 𝗻𝗼𝘁 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝗮𝘀 𝗶𝗻𝗰𝗼𝗺𝗲 𝗲𝗮𝗿𝗻𝗲𝗱

When a member pays twelve months up front, they have paid for a service you have not delivered yet. You have the cash, but you have also taken on an obligation to provide access for the rest of the year. In accounting terms, the money that relates to services you have not yet provided is unearned, or deferred, revenue. It becomes income month by month as the membership is used up, not all at once on the day it lands.

The same applies to prepaid personal training blocks and class packs. Ten sessions paid up front is not ten sessions of income on day one. It is income as the sessions are delivered.

𝗪𝗵𝘆 𝘁𝗵𝗲 𝘁𝗮𝘅 𝘁𝗶𝗺𝗶𝗻𝗴 𝗳𝗼𝗹𝗹𝗼𝘄𝘀 𝘁𝗵𝗲 𝘀𝗲𝗿𝘃𝗶𝗰𝗲

Australian tax law has long treated income from prepaid services as being derived as the services are provided, not simply when the money is received. For a business that takes meaningful amounts up front, that distinction changes the picture at year end. Fees collected in the last weeks of June for a membership that runs into the next year do not all belong to the year they were received.

This is not a loophole and it does not make tax disappear. It is a question of which year the income sits in, and getting it right keeps the tax bill lined up with the year the work is actually done.

𝗪𝗵𝗮𝘁 𝗶𝘁 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝗿𝗲𝗮𝗱𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝗼𝘄𝗻 𝗻𝘂𝗺𝗯𝗲𝗿𝘀

If prepaid memberships are booked as income the moment they arrive, the profit and loss tells a story that is too good in the sign up months and too flat later. Decisions get made on that distorted picture: hiring, equipment, how much the owner draws.

When the revenue is recognised across the period it relates to, the accounts show what the business actually earned each month, which is the version worth making decisions on.

𝗧𝗵𝗲 𝗽𝗮𝗿𝘁 𝘄𝗼𝗿𝘁𝗵 𝗴𝗲𝘁𝘁𝗶𝗻𝗴 𝗿𝗶𝗴𝗵𝘁

How prepaid income is recorded, and when it counts for tax, depends on how a business invoices and reports. It is one of those areas where two gyms with identical takings can show very different profit, purely from how the memberships are handled in the books.

If a lot of your revenue comes in up front, it is worth checking how it is being recognised.

📞 0481 557 490

𝗧𝗛𝗘 𝗟𝗔𝗡𝗗 𝗧𝗔𝗫 𝗕𝗜𝗟𝗟 𝗠𝗢𝗦𝗧 𝗜𝗡𝗩𝗘𝗦𝗧𝗢𝗥𝗦 𝗦𝗘𝗧 𝗜𝗡 𝗠𝗢𝗧𝗜𝗢𝗡 𝗕𝗘𝗙𝗢𝗥𝗘 𝗧𝗛𝗘𝗬 𝗕𝗨𝗬

Most property investors think of land tax as a cost that turns up with each property. In New South Wales it does not work that way, and by the time the assessment lands, the decision that shaped it has usually already been made.

𝗜𝘁 𝗶𝘀 𝗮𝘀𝘀𝗲𝘀𝘀𝗲𝗱 𝗼𝗻 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴 𝘆𝗼𝘂 𝗵𝗼𝗹𝗱, 𝗻𝗼𝘁 𝗲𝗮𝗰𝗵 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆

Revenue NSW adds up the taxable land value of all the land you own in NSW and assesses it as one figure at midnight on 31 December each year. It uses a three year average of the Valuer General's land values, so the number is the land only, not the building on it. Your principal place of residence is exempt. Everything else counts.

This is where the maths surprises people. Three properties at $400,000 of land value each look small on their own. Combined, that is $1.2 million, which sits above the general threshold, and land tax applies to the amount over it. No single property crossed the line. The portfolio did.

𝗧𝗵𝗲 𝘁𝗵𝗿𝗲𝘀𝗵𝗼𝗹𝗱 𝗶𝘀 𝗻𝗼𝘁 𝗴𝘂𝗮𝗿𝗮𝗻𝘁𝗲𝗲𝗱 𝗳𝗼𝗿 𝗲𝘃𝗲𝗿𝘆 𝗼𝘄𝗻𝗲𝗿

The general threshold, around $1.075 million for the 2026 land tax year, applies to individuals and to some structures. It does not apply to every structure. Land held in a special or discretionary trust receives no threshold at all, which means land tax can apply from the first dollar of land value.

A discretionary trust holding a single property can pay land tax where an individual holding the same property would pay nothing. Companies are assessed on the standard rates, and related companies are grouped so they share one threshold between them rather than one each.

𝗪𝗵𝘆 𝘁𝗵𝗲 𝘁𝗶𝗺𝗶𝗻𝗴 𝗺𝗮𝘁𝘁𝗲𝗿𝘀

The ownership structure is fixed at the point of purchase. Whether a property sits in your own name, a trust, a company or a self managed super fund changes the land tax outcome for as long as you hold it, and unwinding it later usually means a sale, stamp duty and possibly capital gains tax.

The investors who are comfortable with their land tax position tend to be the ones who looked at it before they signed, alongside the other holding costs, not after the first assessment arrived. None of this makes trusts or companies wrong. They are chosen for good reasons that often have nothing to do with land tax. The point is that land tax is one of the numbers that decision affects, and it is easier to weigh up before it is locked in.

If you are planning to add to your holdings, working out the land tax position first is worth the conversation.

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𝗧𝗛𝗘 𝗥𝗘𝗣𝗢𝗥𝗧 𝗧𝗛𝗘 𝗔𝗧𝗢 𝗔𝗟𝗥𝗘𝗔𝗗𝗬 𝗛𝗔𝗦 𝗕𝗘𝗙𝗢𝗥𝗘 𝗬𝗢𝗨 𝗟𝗢𝗗𝗚𝗘

Most business owners know when their BAS is due. Far fewer know about the report that quietly matches their contractor payments against what those contractors declared. This year the deadline is today - 28 August.

𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗧𝗣𝗔𝗥 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗶𝘀

The Taxable Payments Annual Report is an ATO reporting obligation for businesses that pay contractors in certain industries. Building and construction is one. So is cleaning. Courier and road freight, IT, and security or investigation services are the others. If a business earns 10% or more of its income from these services and pays contractors to help deliver them, it generally needs to lodge. Building and construction businesses usually report regardless of the percentage.
The report lists each contractor you paid during the year: their ABN, name, address, and the gross amount paid including GST. It is based on what you actually paid, not what was invoiced.

𝗪𝗵𝘆 𝘁𝗵𝗲 𝗔𝗧𝗢 𝗮𝘀𝗸𝘀 𝗳𝗼𝗿 𝗶𝘁

The TPAR exists so the ATO can cross check. It takes the payments you report and matches them against the income each contractor declares in their own return. Where the numbers do not line up, it is the contractor who has questions to answer, but the data starts with your report. From Tax Time 2026 these amounts also pre-fill into the returns of sole traders and individuals in business, so the matching is faster than it used to be.

𝗪𝗵𝗲𝗿𝗲 𝗶𝘁 𝗴𝗼𝗲𝘀 𝘄𝗿𝗼𝗻𝗴

The common problems are simple ones. Missing ABNs. Cash payments to subbies that never made it into the books. A business that assumed it did not need to lodge because nobody had ever mentioned it. Paper lodgement is no longer accepted, so it has to go through accounting software or the ATO's online services. Late or missing reports can attract penalties, and a non lodgement is the kind of thing that draws a closer look at the rest of the business.

𝗜𝗳 𝘆𝗼𝘂 𝗮𝗿𝗲 𝗻𝗼𝘁 𝘀𝘂𝗿𝗲 𝗶𝘁 𝗮𝗽𝗽𝗹𝗶𝗲𝘀 𝘁𝗼 𝘆𝗼𝘂

That 28 August deadline is today, and it covers payments made across the 2025 to 2026 financial year. If you pay subcontractors and you are in one of the listed industries, it is worth confirming your position today rather than after a letter arrives. If you genuinely do not need to lodge, a non lodgement advice tells the ATO that and stops the reminders.

If you are not certain whether your business needs to lodge, today is the day to check.

📞 0481 557 490 | diagnosticaccounting.com.au

𝗣𝗿𝗼𝗽𝗼𝘀𝗲𝗱: 𝗔 𝟯𝟬% 𝗧𝗮𝘅 𝗼𝗻 𝗧𝗿𝘂𝘀𝘁 𝗗𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀. 𝗧𝗵𝗮𝘁 𝗠𝗼𝗻𝗲𝘆'𝘀 𝗔𝗹𝗿𝗲𝗮𝗱𝘆 𝗧𝗮𝘅𝗲𝗱.

The government is proposing a 30% minimum tax on discretionary trust distributions.
Here's what you need to understand about it - and our position.

𝗛𝗼𝘄 𝘁𝗿𝘂𝘀𝘁 𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀 𝗮𝗿𝗲 𝗰𝘂𝗿𝗿𝗲𝗻𝘁𝗹𝘆 𝘁𝗮𝘅𝗲𝗱

Right now, when a family trust makes a distribution to a beneficiary, the beneficiary pays income tax on that amount at their personal marginal rate. This is how it's worked for decades - and it's entirely legitimate. The trustee decides each year how to allocate income among beneficiaries, and each person pays tax at their own rate.

This is not a loophole. This is how the legislation was designed to work.

𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗽𝗿𝗼𝗽𝗼𝘀𝗮𝗹 𝘄𝗼𝘂𝗹𝗱 𝗱𝗼

The proposal would impose a minimum 30% tax at the trust level on distributions to individuals. This is on top of the income tax that beneficiaries already pay.
A beneficiary on a 19% marginal rate currently pays 19%. Under this proposal, 30% would be withheld at the trust level first - and depending on the beneficiary's rate, they may or may not recover the excess.

For low-income beneficiaries, it means overpaying and waiting for a refund. For the trust itself, it's a cash flow impost that doesn't currently exist.

𝗧𝗵𝗲 𝗱𝗼𝘂𝗯𝗹𝗲 𝗰𝗵𝗮𝗿𝗴𝗲 𝗿𝗲𝗮𝗹𝗶𝘁𝘆

Beneficiaries pay income tax on distributions now. This proposal adds another charge at the trust level on the same income. Whether that results in double taxation depends on individual circumstances - but for many trust structures, the effective tax burden increases regardless.

𝗪𝗵𝗲𝗿𝗲 𝗶𝘁 𝘀𝘁𝗮𝗻𝗱𝘀

This is not law. It's a proposal. It still needs to pass Parliament, and there is significant professional and industry opposition to it. We are watching it closely.

𝗢𝘂𝗿 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻

Trusts are a legitimate, widely used structure. The income splitting they allow is intentional - it's part of how the system was built. A blanket minimum tax that treats all distributions as suspect penalises business owners who have structured their affairs legally and correctly.

If you have a family trust and you're unsure what this means for your position - that's a conversation worth having now, while the proposal is still being debated and planning options remain open.

0481 557 490 - diagnosticaccounting.com.au

𝗧𝗿𝗮𝗻𝘀𝗳𝗲𝗿𝗿𝗶𝗻𝗴 𝗺𝗼𝗻𝗲𝘆 𝗳𝗿𝗼𝗺 𝘆𝗼𝘂𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝘁𝗼 𝘆𝗼𝘂𝗿𝘀𝗲𝗹𝗳? 𝗧𝗵𝗲 𝗔𝗧𝗢 𝗵𝗮𝘀 𝗮 𝗻𝗮𝗺𝗲 𝗳𝗼𝗿 𝘁𝗵𝗮𝘁.

It's called a deemed dividend - and it's one of the most expensive tax mistakes in small business.

This is one of the most common - and most costly - misunderstandings in small business.

The tax law that governs this is called Division 7A.

𝗪𝗵𝗮𝘁 𝗗𝗶𝘃𝗶𝘀𝗶𝗼𝗻 𝟳𝗔 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗶𝘀

Division 7A prevents company profits from being distributed to shareholders tax-free through informal loans or payments. It exists because without it, a business owner could leave profits in a company (taxed at 25-30%), lend that money to themselves personally, and never repay it - effectively accessing business profits without paying personal income tax.

𝗪𝗵𝗮𝘁 𝘁𝗿𝗶𝗴𝗴𝗲𝗿𝘀 𝗶𝘁

Transferring money from the company account to your personal account without classifying it as wages or a dividend. Paying a personal expense directly from the company account. Taking an informal loan from the company without a properly structured loan agreement. Each of these can trigger a deemed dividend - the worst possible tax outcome.

𝗪𝗵𝗮𝘁 𝗮 𝗱𝗲𝗲𝗺𝗲𝗱 𝗱𝗶𝘃𝗶𝗱𝗲𝗻𝗱 𝗺𝗲𝗮𝗻𝘀

The ATO treats the amount as an unfranked dividend - meaning you pay income tax on it at your marginal personal rate with no franking credits to offset it. For a business owner on a high income, this can mean paying 47% on money you've already been taxed on at the company level.

𝗛𝗼𝘄 𝗶𝘁'𝘀 𝘂𝘀𝘂𝗮𝗹𝗹𝘆 𝗺𝗮𝗻𝗮𝗴𝗲𝗱

There are legitimate ways to access company funds - through salary and wages (taxed as income), through franked dividends (with tax credits attached), or through a properly structured Division 7A loan agreement (which requires minimum interest payments and a set repayment schedule). Each has different implications depending on your circumstances and the company's cash position.

𝗪𝗵𝗲𝗿𝗲 𝗶𝘁 𝗰𝗼𝗺𝗺𝗼𝗻𝗹𝘆 𝗰𝗮𝘁𝗰𝗵𝗲𝘀 𝗽𝗲𝗼𝗽𝗹𝗲

Using the company account as a personal expense account during the year, then trying to fix the bookkeeping at tax time. Loans that started small and grew year on year. Director loan accounts with balances that have never been formally addressed. Forgiven loans where the director expected there would be no tax consequence because it was "their own money." Trust distributions held in the company's books as a loan from the trust to the company - if the beneficiary uses trust funds for personal purposes, Division 7A can still apply.

𝗪𝗵𝗮𝘁 𝘁𝗵𝗶𝘀 𝗿𝗲𝗮𝗹𝗹𝘆 𝗺𝗲𝗮𝗻𝘀

Many small business owners don't think of themselves as borrowing from their company. They think of it as accessing their own money. The law distinguishes between the two. The company is a separate legal entity - even if you own 100% of it.

Getting Division 7A wrong can result in years of undeclared income being reassessed, penalties for incorrect returns, and interest on unpaid tax.

The fix is usually straightforward if caught early. It becomes considerably more complex when years of undocumented transactions need to be unwound.

If your company director loan account has a debit balance and you don't have formal loan documentation in place, that's the conversation to start.

0481 557 490 - diagnosticaccounting.com.au

𝗥𝗲𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗜𝘀 𝗧𝗼𝘂𝗴𝗵𝗲𝗿 𝗡𝗼𝘄. 𝗛𝗲𝗿𝗲'𝘀 𝗪𝗵𝘆.

If you're a property investor who's refinanced before, you may have found the process recently slower, harder, and more conditional than you expected.

That's not your imagination. The environment has changed in several ways at once.

𝗧𝗿𝘂𝘀𝘁 𝘁𝗮𝘅 𝘀𝗲𝘁𝘁𝗶𝗻𝗴𝘀 𝗮𝗿𝗲 𝗰𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗹𝗲𝗻𝗱𝗲𝗿 𝘂𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝘁𝘆

The proposed 30% minimum tax on discretionary trust income is not yet law - but lenders are already factoring in the uncertainty. If your income flows through a family trust, some lenders are applying more conservative assessments of what that income will look like going forward. The question they're asking: if this policy passes, what does your serviceability look like then?

𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 𝘁𝗶𝗺𝗲𝗳𝗿𝗮𝗺𝗲𝘀 𝗮𝗿𝗲 𝘀𝗹𝗼𝘄𝗲𝗿

Lenders are applying stricter documentation requirements - particularly for business owners, self-employed applicants, and trust structures. The volume of supporting paperwork has increased, and turnaround times have extended as a result. Applications that would have moved in two weeks are now taking four to six.

𝗟𝗲𝘀𝘀 𝗳𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗼𝗻 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲

Lenders have tightened their appetite for complex structures. Applications involving multiple trusts, multiple entities, or unusual ownership arrangements are receiving more scrutiny and, in some cases, outright declines that wouldn't have happened 18 months ago.

𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗯𝘂𝗳𝗳𝗲𝗿𝘀 𝗮𝗿𝗲 𝗯𝗶𝘁𝗶𝗻𝗴

Lenders stress-test at your rate plus a serviceability buffer. With rates where they are, that buffer is squeezing borrowing capacity more than investors are expecting - particularly those with multiple properties.

𝗪𝗵𝗮𝘁 𝗵𝗲𝗹𝗽𝘀 𝗿𝗶𝗴𝗵𝘁 𝗻𝗼𝘄

Up-to-date financials - lodged, reconciled, and reflecting the current position of your business and investment portfolio. A clear picture of your trust structure, what income flows through it, and how it's documented. An accountant who can speak to your numbers and provide supporting documentation quickly when a lender asks.

The investors getting across the line aren't necessarily the ones with the most equity. They're the ones who arrive prepared.

0481 557 490 - diagnosticaccounting.com.au

𝗔𝗜 𝗜𝘀 𝗧𝗮𝗸𝗶𝗻𝗴 𝗢𝘃𝗲𝗿 𝗕𝗼𝗼𝗸𝗸𝗲𝗲𝗽𝗶𝗻𝗴. 𝗛𝗲𝗿𝗲'𝘀 𝗪𝗵𝗮𝘁 𝗜𝘁 𝗖𝗮𝗻'𝘁 𝗧𝗼𝘂𝗰𝗵.

There's a lot of noise right now about AI replacing accountants.
Most of it is conflating two very different roles - and that confusion is costing business owners clarity on something that matters.
Here's the distinction that actually counts.

𝗪𝗵𝗮𝘁 𝗔𝗜 𝗶𝘀 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗿𝗲𝗽𝗹𝗮𝗰𝗶𝗻𝗴

Bookkeeping. The transactional, repetitive work of recording every sale, categorising every expense, reconciling accounts, matching receipts. Xero, MYOB, and a growing number of AI tools can do this faster and more accurately than a human bookkeeper.
That part is happening. It's not a prediction - it's already here.

𝗪𝗵𝗮𝘁 𝗔𝗜 𝗶𝘀𝗻'𝘁 𝗿𝗲𝗽𝗹𝗮𝗰𝗶𝗻𝗴

The work of an accountant sits in a completely different category.
Structuring a business correctly to protect assets and minimise tax. Advising on whether to buy or lease. Reviewing whether a trust distribution complies with the ATO's current rules. Understanding the specific circumstances of a business and what they mean for the owner's tax position.
These require professional judgment, current technical knowledge, and accountability. AI can surface information. It can't sign off on your return. It can't represent you in an ATO audit. It can't be held professionally responsible for the advice it gives.

𝗪𝗵𝘆 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿𝘀 𝗳𝗼𝗿 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀

Business owners using AI bookkeeping tools sometimes draw the wrong conclusion: that clean, automated books mean they're covered. They're not. Clean data is the starting point for good advice - not a substitute for it.
If anything, the automation of routine bookkeeping makes the advisory layer more important. The faster and cleaner your numbers are, the more meaningful the conversation with your accountant becomes - and the earlier you can act on what they tell you.

𝗧𝗵𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝘁𝗼 𝗮𝘀𝗸 𝘆𝗼𝘂𝗿𝘀𝗲𝗹𝗳

If you're currently paying for bookkeeping but not getting proactive accounting advice - you may have the relationship the wrong way around. What AI is taking over is the data entry. The strategy, the compliance, and the protection still need a person.
That's the part we do.

0481 557 490 - diagnosticaccounting.com.au

𝟵𝟬𝟬,𝟬𝟬𝟬 𝗔𝘂𝘀𝘁𝗿𝗮𝗹𝗶𝗮𝗻 𝗳𝗮𝗺𝗶𝗹𝘆 𝘁𝗿𝘂𝘀𝘁𝘀. 𝗢𝗻𝗲 𝗺𝗮𝘀𝘀𝗶𝘃𝗲 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗿𝗲𝘄𝗿𝗶𝘁𝗲.

The Federal Budget has introduced a proposed 30% minimum tax on discretionary trusts - completely altering the future of family wealth planning alongside the ATO's aggressive stance on Section 100A.

If you operate your business or investments through a trust, the rules of the game are shifting. Here is the breakdown:

📌 𝗧𝗵𝗲 𝗡𝗲𝘄 𝟯𝟬% 𝗧𝗿𝘂𝘀𝘁 𝗧𝗮𝘅 𝗙𝗹𝗼𝗼𝗿 (𝗣𝗿𝗼𝗽𝗼𝘀𝗲𝗱 𝗳𝗿𝗼𝗺 𝟭 𝗝𝘂𝗹𝘆 𝟮𝟬𝟮𝟴)

The Government has announced a 30% minimum tax rate on the taxable income of discretionary trusts.

❌ The Death of Low-Rate Income Splitting:
Distributing to adult children, university students, or low-income family members to use their lower marginal tax brackets will no longer bypass the 30% tax floor.

❌ Non-Refundable Credits:
While individual beneficiaries get a credit for the tax the trustee pays, it is non-refundable. If their personal tax rate is lower than 30%, the excess is completely lost.

❌ The Bucket Company Trap:
Corporate beneficiaries are slated to be excluded from receiving these tax credits. Distributing to a bucket company could trigger severe double-taxation, potentially dragging effective rates over 60%.

📌 𝗧𝗵𝗲 𝗖𝘂𝗿𝗿𝗲𝗻𝘁 𝗧𝗵𝗿𝗲𝗮𝘁 - 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟬𝟬𝗔 & 𝗗𝗶𝘃𝗶𝘀𝗶𝗼𝗻 𝟳𝗔

You don't have to wait until 2028 for the tax landscape to get complicated. The ATO is already actively auditing current and past distributions:

⚠️ It targets "reimbursement agreements" where income is distributed on paper to a low-tax beneficiary, but the actual money is funneled to someone else.

⚠️ If hit, the ATO cancels the distribution and taxes the trustee at the top marginal rate (47%).

⚠️ Unpaid Present Entitlements (UPEs) to companies continue to be strictly monitored under Division 7A loan rules.

💼 𝗪𝗵𝗮𝘁 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀:

Family trusts aren't broken - but the standard "copy-paste" distribution strategies used for the last decade are officially dead.

With transitional "restructure rollover relief" proposed to open on 1 July 2027, many business owners will need to evaluate whether they should pivot to alternative structures (like companies or fixed trusts) or completely overhaul their distribution minutes before the deadlines.

Before you sign your next EOFY trustee resolutions, your trust framework needs an expert review. Let's look at your structure before the window closes.

📞 𝟬𝟰𝟴𝟭 𝟱𝟱𝟳 𝟰𝟵𝟬
🌐 𝗱𝗶𝗮𝗴𝗻𝗼𝘀𝘁𝗶𝗰𝗮𝗰𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴.𝗰𝗼𝗺.𝗮𝘂

𝗪𝗲 𝗮𝗻𝗮𝗹𝘆𝘀𝗲𝗱 𝗵𝘂𝗻𝗱𝗿𝗲𝗱𝘀 𝗼𝗳 𝗔𝘂𝘀𝘁𝗿𝗮𝗹𝗶𝗮𝗻 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀. 𝗛𝗲𝗿𝗲'𝘀 𝘄𝗵𝗮𝘁 𝘄𝗲 𝗳𝗼𝘂𝗻𝗱.

Most business owners think their biggest financial risk is a slow month or a bad client.

It's not. The risks that actually hurt businesses in 2026 are structural - and most owners don't know they're exposed until it's too late to act

Here's what keeps coming up across the businesses we work with:

🔴 No separation between personal and business assets - one lawsuit or ATO debt and everything is on the table

🔴 Super obligations being tracked manually - with Payday Super starting 1 July, this is now a compliance minefield

🔴 Trust distributions set up years ago - never reviewed against current ATO rules, quietly creating risk

🔴 No documented loan agreements between related entities - the ATO is actively looking at this

Most of these don't show up on a profit and loss. They show up when it's too late.

That's why we built a free diagnostic tool
👉 https://www.diagnosticaccounting.com.au/resources/audit

90 seconds. 12 questions. You get a personalised risk score and a breakdown of where your business sits compared to others in your industry.

No fluff. No sales call required to see your results.

👉 Click the link to begin
https://www.diagnosticaccounting.com.au/resources/audit

🚨 Payday Super starts 1 July 2026. If you run a business with employees, this is what changes.

Most employers still don't fully understand what's actually changing - or what happens if they're not set up correctly.

Here's what Payday Super means in practice:

📅 WHAT CHANGES FROM 1 JULY 2026:

Super must be paid on payday - not quarterly
Currently, employers can pay super quarterly. From 1 July, SGC contributions must be paid at the same time as wages - or within 3 days of payday for clearing house processing. The quarterly lodgement window disappears entirely.

The rate stays at 12%
The SG rate is 12% for 2025-26 and will remain at 12% from 1 July 2026. This doesn't change. What changes is the frequency.

The ATO will know immediately if you miss it
Payday Super is powered by STP Phase 2 data. The ATO will receive payroll data on payday. That means late super payments will be visible to the ATO in near real-time. There's nowhere to catch up quietly anymore.

Late payments are now automatically an SGC liability
Under the current system, employers have some buffer. Under Payday Super, if super isn't paid on time, an SGC liability is triggered automatically. SGC is calculated differently from ordinary super. It's based on ordinary time earnings, not just OTE, and it's not tax deductible.

Cash flow planning has to change
If you've been using the quarterly super window to manage cash flow, that option disappears. Super becomes part of your weekly payroll cost, like PAYG withholding. Businesses that don't adapt their cash flow planning now will feel the squeeze immediately.

🔧 WHAT YOU NEED TO DO BEFORE 1 JULY:

Confirm your payroll software is updated for Payday Super compliance

Review your pay cycles and cash flow projections

Check whether you're using a clearing house and confirm their processing timelines meet the new 3 day requirement

Speak to your accountant about how this changes your working capital position

This isn't a small admin change. Businesses that treat it like one are going to have a problem by August.

📞 0481 557 490
🌐 diagnosticaccounting.com.au