Many people think EOFY planning is only about finding more deductions. However, without a professional review, you may miss important compliance issues or planning opportunities that could later be identified by the ATO.

This information is general in nature and does not take into account your personal objectives, financial situation or needs.

Issue 1

Family trust distribution tax (47 per cent FTDT)
If your trust has made a Family Trust Election (FTE), distributions outside the nominated family group may, in some circumstances, trigger a 47 per cent penalty tax under Section 271-15 of Schedule 2F of the ITAA 1936. In many cases this penalty is difficult to have remitted, so the consequences can be significant.

Potential triggers may include:

• divorce or separation
• death of a beneficiary
• business restructures
• company ownership changes (including small changes in ownership outside the family group)

Important
The ATO can assess this tax for prior income years, and General Interest Charge (GIC) can compound over time. If you have a family trust, it is important to periodically review distributions, FTEs and structures with a professional adviser.

Issue 2

Unpaid present entitlements (UPEs)
Following recent case law and ATO guidance, UPEs to corporate beneficiaries may need closer review to ensure they are treated consistently with current Division 7A requirements. Trusts that have relied on earlier interpretations may need to consider sub-trusts or other arrangements to maintain compliance.

The ATO has increased its focus on discretionary trusts in relation to UPEs and reimbursement agreements. Where a reimbursement agreement is found, the ATO may in some cases treat the relevant income as being taxed at 47 per cent. It is important to seek advice specific to your trust.

Issue 3

Missed superannuation concessions
You may be able to contribute up to the annual concessional cap (currently $30,000, plus any available carry forward amounts if you are eligible) and claim a tax deduction, provided contributions are received and allocated by your fund before 30 June and all conditions are satisfied.

Higher income earners often miss opportunities such as:

• salary sacrifice arrangements through their employer
• personal deductible contributions, including catch up contributions where eligibility criteria are met

Potential impact
Missing these concessions may result in paying more tax than necessary and may reduce the amount you are able to build in superannuation over time. The actual impact depends on your marginal tax rate, total super balance and contribution history.

Issue 4

Income and expense timing

• Receiving additional income late in June may move you into a higher marginal tax bracket for that financial year.
• Prepaying eligible expenses, where appropriate, may bring forward a deduction into the current financial year (subject to rules and thresholds).

Without advice, some individuals and businesses miss the opportunity to manage the timing of income and expenses within the rules. Any timing strategy must take into account cash flow, commercial considerations and anti avoidance provisions, and should only be implemented after seeking advice.

Issue 5

Capital gains tax (CGT) planning
Selling an asset before 30 June without planning may trigger a CGT event that could potentially have been managed more effectively.

With recent Federal Budget announcements proposing changes to CGT and related concessions (not yet law), it is even more important to understand how any future rules might affect you before making major decisions.

Key considerations include:

• 50 per cent CGT discount

  Generally, the 50 per cent discount requires an asset to be held for more than 12 months. Recent Budget announcements have raised the prospect of changes to how CGT discounts or related concessions may apply for certain taxpayers, however these proposals are still subject to the parliamentary process and may change before becoming law.
• Small business CGT concessions

  In some cases, the existing small business CGT concessions may significantly reduce or eliminate CGT where the structure and eligibility criteria are satisfied. Proposed measures in the Federal Budget may alter access to, or the design of, some concessions in future years, so it is important not to assume that current rules will apply in the same way going forward.

Important
CGT outcomes depend heavily on your specific circumstances, including ownership structure, timing, previous transactions and your overall position. In addition, Budget measures are only proposals until enacted and may be amended or delayed.

Careful review and up to date advice are essential before disposing of significant assets or relying on particular concessions, especially in light of possible future changes.

Issue 6

Cash flow provisioning
Many taxpayers are surprised by their tax bill in July because they have not set aside funds during the year. A planning session can help estimate your likely tax liability so you can provision for it and potentially reduce cash flow stress and interest charges.

Why 2026 EOFY requires extra attention
From 1 July 2026, new reporting and withholding obligations for certain closely held structures, together with greater use of tax file number based pre-filling, are expected to make discrepancies more visible in a shorter timeframe.

The Division 296 superannuation changes will also introduce an additional tax on earnings that relate to superannuation balances above $3 million. This is likely to increase the importance of reviewing superannuation, investment structures and longer term strategies for clients with higher balances.

Current ATO guidance indicates that the Commissioner may be more willing to remit GIC in relation to historic FTDT issues where taxpayers proactively review and address problems by a specified date. Remission is not automatic and is subject to ATO discretion, so early engagement is important.

How a planning session can help
A professional EOFY planning session with a licensed adviser may assist you to:

• identify potential FTDT exposure and review family trust elections and distributions,
• review UPEs and Division 7A implications in light of current ATO guidance and case law,
• maximise eligible superannuation contributions within the contribution caps,
• consider the timing of income and expenses in a compliant and commercially sensible way,
• plan asset sales with CGT outcomes in mind, and
• estimate and provision for expected tax liabilities.

Who should consider this?
You may benefit from EOFY planning if you:

• own a business or are involved in a discretionary or family trust,
• earn over $135,000,
• hold significant investments or are planning to sell major assets,
• have not reviewed your structure in the last 12 months, or
• have experienced major life events (such as marriage, divorce, death in the family or the sale of a business).

The bottom line
EOFY issues can be costly if left unattended, however many problems can be reduced or avoided with timely, professional planning.

Rather than focusing solely on ‘last minute deductions’, a structured review helps ensure your strategies remain aligned with current rules, ATO guidance and your longer term financial goals.