07 3369 5055
From the proposed Division 296 super tax to changes in ATO interest deductions and a global tax bill making headlines, July’s update covers what’s shaping the financial landscape for Australians. Here’s what’s new and what to watch in the months ahead.
Division 296 Super Tax – What It Means for You
The Federal Government’s proposed Division 296 super tax would impose an extra 15% tax on super earnings for individuals with total super balances above $3 million.
While not yet law, the measure could apply from 1 July 2025, with the first tax assessments likely after June 2026. The tax is personal (not paid by the fund) and can be settled from your super or personal funds.
What you can do now:
Review liquidity and cash flow within your super fund
Keep asset valuations up to date
Estimate combined super balances across funds
Seek tailored advice before making major changes
Example:
If your super grows from $4 million to $4.12 million, one-quarter of your earnings ($30 000) could be taxed at 15% — an extra $4 500 in tax
ATO Interest Deductions No Longer Claimable
From 1 July 2025, the ATO’s General Interest Charge (10.78%) and Shortfall Interest Charge (6.78%) will no longer be tax-deductible.
This means late or corrected payments will cost more in after-tax terms.
Tip: Pay off ATO debts as soon as possible, or explore refinancing options at a lower interest rate. Even under payment plans, GIC continues to accrue daily.
Beware of Finfluencers and “Tax Hacks”
Social-media “finfluencers” are under the ATO’s microscope after promoting false or exaggerated deduction claims. Examples include:
Claiming pets as “guard dogs”
Writing off designer handbags as laptop bags
Deducting fuel with no logbook
Treating swimwear as a uniform
These claims can trigger audits, penalties, or even prosecution. If it sounds too good to be true — it is. Always verify advice with a registered tax professional.
Are Trusts Still Worth It?
Trusts remain valuable for asset protection and estate planning, but rising compliance demands and closer ATO scrutiny are prompting some to transition to company structures.
Trustees must finalise distribution resolutions before 30 June each year — often without complete financial data — increasing compliance risk.
Still, trusts can play a powerful role in investment and family-wealth strategies when managed correctly. The key is getting professional guidance early.
Global Spotlight: “The One Big Beautiful Bill”
A proposed US tax bill could increase taxes on Australian super funds and investors with US exposure.
With around $400 billion of Australian super invested in US markets, higher taxes could erode long-term returns.
While it’s not yet law, the situation underscores the impact of global tax policy on Australian portfolios.
Be alert, not alarmed — stay informed, and seek advice if you hold overseas investments.
Tax and super rules are evolving rapidly — from Canberra to Capitol Hill. If you’d like to understand how these changes may affect your personal or business finances, reach out to Strategic 360 for clear, practical advice.
Kerrily and Louise – Directors
