The ATO is closely checking employers who allow personal use of work vehicles. Their advanced data systems can quickly detect mistakes, which may result in audits, penalties, added interest, and reputational risk. For more details, refer to the latest ATO FBT audit warning: Misreporting FBT on personal use of work vehicles | Australian Taxation Office

If your business provides vehicles to employees—whether for operational needs or as an added benefit—it is important to review your Fringe Benefits Tax (FBT) obligations carefully. Proper reporting and record-keeping can help you avoid unnecessary risks and costs.

Misconceptions Around Dual-Cab Utes

One common mistake involves dual-cab utes. Many employers believe these vehicles are automatically exempt from FBT, but this is not always correct. The tax treatment depends on both the design of the vehicle and how it is actually used during the FBT year. For example, even if a vehicle can carry more than one tonne or is not mainly designed for passengers, FBT may still apply if there is private use.

The ATO has already identified many cases where businesses incorrectly claimed full exemptions for such vehicles. As a result, those employers had to pay additional tax along with interest. To avoid this situation, it is essential to have proper evidence supporting any exemption claimed. Although formal logbooks may not always be required, having records similar to a logbook can make it much easier to justify your position during an ATO review or audit.

Proper Allocation of Private and Business Use

If a full FBT exemption does not apply, tax is usually based on the private use of the vehicle. You need to work out how much of the costs—such as fuel, repairs, and depreciation—relate to personal trips. Ignoring this can cause issues during an audit. Keeping clear records and correctly splitting costs may reduce FBT. Any FBT payable is the employer’s responsibility.

Obligation to Lodge FBT Returns

Another area often overlooked is the requirement to lodge FBT returns. Even if you believe the amount involved is small or insignificant, you may still be required to submit a return. The ATO uses data analytics to identify businesses that fail to lodge, and penalties for non-compliance can be severe—up to 200% of the tax payable, plus interest charges.

To stay compliant, businesses should take note of key deadlines. FBT returns are generally due on 21 May each year. Filing on time helps avoid penalties and allows for better cash flow planning.

Importance of Maintaining Accurate Records

Maintaining proper records, including logbooks, is one of the most effective ways to manage FBT obligations. A valid logbook should record odometer readings, trip details, and the purpose of each journey over a continuous 12-week period. This record can usually be used for up to five years, provided usage patterns do not significantly change. Even in situations where a logbook is not strictly required, keeping detailed records can prevent higher tax liabilities.

Using digital tools can also improve efficiency. Many logbook apps are available to simplify tracking, reduce errors, and save time. In addition to supporting FBT calculations, good records may also help support other tax deductions.

Commercial Implications of Non-Compliance

FBT compliance is not only about meeting legal requirements. It also has practical business implications. An ATO audit can consume time and resources, distracting you from your core operations. It may also affect how your business is viewed by clients, lenders, and partners.

On the other hand, proper FBT management ensures that you only pay the correct amount of tax. It helps protect your cash flow and may even identify opportunities to improve tax efficiency.

Recommended Actions

To reduce risk, businesses should regularly review their vehicle policies, update records, and ensure that all reporting is accurate. Taking a proactive approach can make compliance easier and prevent costly mistakes.

Pitt Martin Group is a CPA accounting firm, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Australian Society of Certified Practising Accountants (CPA), Australian Taxation Registered Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Angela Abejo @ Pitt Martin Tax

The Australian Government’s “Better Targeted Superannuation Concessions” reform, commonly referred to as Division 296, has now been enacted and will commence from 1 July 2026. This measure introduces additional tax considerations for individuals with substantial superannuation balances. For affected taxpayers, it is essential to understand how the rules operate, the policy rationale behind them, and the planning implications moving forward.

Policy Intent Behind Division 296

The primary objective of Division 296 is to improve the equity and long-term sustainability of superannuation tax concessions. Rather than applying broad changes across the entire system, the legislation specifically targets individuals with significant super balances. In doing so, it seeks to ensure that higher-balance members pay an increased level of tax on earnings attributable to those balances.

Applicability: Thresholds and Tax Outcomes

From the 2026–27 income year onward, Division 296 applies where an individual’s total superannuation balance exceeds prescribed thresholds:

• $3 million (large balance threshold)
• $10 million (very large balance threshold)

These thresholds will be indexed over time. The effect of the new regime is an increase in the effective tax rate applied to earnings associated with balances above these limits:

• Balances up to $3 million remain subject to the standard 15% tax rate within the fund
• Earnings linked to balances between $3 million and $10 million will attract an additional 15% tax, bringing the effective rate to 30%
• For balances exceeding $10 million, a further 25% tax applies, resulting in a combined effective rate of 40%

Certain individuals are excluded from the operation of Division 296 despite exceeding the thresholds. These include minors receiving death benefit pensions and individuals who have contributed structured settlement amounts arising from personal injury compensation.

In the event of death, an individual’s total superannuation balance ceases to exist. However, Division 296 may still apply for the income year in which death occurs (other than in the first year of implementation), provided the individual’s balance exceeded $3 million at the beginning of that year. As superannuation does not generally form part of the estate, this outcome highlights the importance of incorporating these rules into estate planning considerations.

Calculation and Assessment Mechanism

For self-managed superannuation funds (SMSFs), Division 296 earnings are determined based on taxable income, subject to a number of adjustments. These adjustments account for items such as concessional contributions included in assessable income, exempt pension income, non-arm’s length income (already taxed at the highest marginal rate), and income derived through pooled superannuation trusts.

Additional modifications may apply in relation to capital gains where the fund has elected to apply specific small-fund CGT provisions.

Once the adjusted earnings figure is established, it is allocated to individual members using an actuarially determined proportion. The Australian Taxation Office (ATO) then uses this information to calculate and issue the individual’s Division 296 tax liability.

Although the liability is imposed on the individual rather than the superannuation fund, payment flexibility is provided. Taxpayers may either settle the liability personally or elect to have the amount withdrawn from their nominated superannuation interest.

Practical Considerations and Planning Opportunities

Individuals approaching or exceeding the relevant thresholds should seek professional advice to assess the financial impact of Division 296. This may involve tailored projections, consideration of available elections (including capital gains tax options), and planning for cash flow and compliance requirements.

The introduction of this measure also presents an opportunity to reassess whether maintaining excess wealth within the superannuation environment remains optimal. Alternative investment structures may, in some cases, provide greater flexibility or tax efficiency for amounts above the applicable thresholds.

Early and proactive planning will be critical to managing the implications of Division 296 effectively.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Zoe Ma @ Pitt Martin Tax

As Fringe Benefits Tax (FBT) season approaches, family businesses should take a closer look at how they provide benefits to working directors and family members. A recent court case has drawn significant attention in this area—not only because of its facts, but also because of its journey through three levels of review and what it ultimately means for closely held structures.

For many family-run businesses, the line between “ownership benefits” and “employment benefits” is often blurred. This case serves as a timely reminder that how benefits are characterised—and documented—can make all the difference.

A business built on overlapping roles

The case involved three brothers who operated a large business empire through a discretionary trust. The group’s activities spanned petrol stations, convenience stores, fast food outlets, and more. The brothers were deeply involved in the business, acting as directors, decision-makers, and controllers of the trust.

However, unlike traditional executives, they did not receive formal salaries or wages. Instead, profits and economic benefits flowed through the family trust, of which they were beneficiaries.

Among the benefits provided was access to a fleet of over 40 luxury and high-performance vehicles, used for both business and personal purposes. Importantly, the private use component was not treated as salary. Instead, related costs were allocated to a beneficiary account and later offset through trust distributions.

From a commercial perspective, this type of arrangement is not unusual in family groups. But from a tax perspective, it raised a critical question: were these benefits provided as part of employment, or as part of ownership?

The ATO’s position

The Australian Taxation Office (ATO) took the view that the private use of the vehicles gave rise to FBT liabilities. Their argument was straightforward: the brothers were effectively employees, and the benefits were provided in respect of their work.

If accepted, this would significantly broaden the application of FBT in family business contexts—especially where individuals perform active roles without formal remuneration.

Three decisions, three different outcomes

What makes this case particularly noteworthy is its progression through three levels of decision-making, each reaching a different conclusion.

1. Administrative Appeals Tribunal (AAT)
The AAT initially ruled in favour of the taxpayer. It found that the brothers were not “employees” for FBT purposes. Even if they were treated as employees on a hypothetical basis, the Tribunal concluded that the vehicle benefits were not provided “in respect of” employment. Instead, they arose from the brothers’ roles as beneficiaries and controllers of the trust.

2. Federal Court (single judge)
The Commissioner appealed, and the Federal Court overturned the AAT’s decision. The judge took a broader view of the FBT rules, finding that the brothers could be treated as employees under the legislation. On that basis, the vehicle benefits were considered to be connected to their employment, and therefore subject to FBT.

This decision caused concern among advisors and business owners, as it suggested a potentially wider reach of FBT into family business arrangements.

3. Full Federal Court (final decision)
The matter was then appealed again—this time to the Full Federal Court. In March 2026, the Full Court unanimously allowed the taxpayer’s appeal and effectively restored the AAT’s original decision.

The Full Court confirmed two key points:

• It was open to conclude that the brothers were not employees in the traditional legal sense, despite their active involvement in the business.
• Even if they were employees, there was not a sufficient connection between the benefits and any employment relationship.

This final decision provides an important degree of reassurance for family businesses.

Key takeaways: it’s about substance, not labels

One of the strongest messages from the case is that substance matters more than labels.

The courts looked beyond titles such as “director” and focused on the actual nature of the relationship. Factors such as the absence of employment contracts, lack of wages and leave entitlements, and the existence of separate operational managers all supported the conclusion that the brothers were not employees in the ordinary sense.

Equally important was the purpose of the benefits. The vehicles were not provided as a substitute for salary, but rather as part of the broader economic entitlements flowing from the trust structure.

For family businesses, this reinforces the idea that simply holding multiple roles does not automatically trigger FBT. The key is identifying which role is dominant in a given context.

Why documentation is critical

While the outcome was favourable to the taxpayer, it should not be seen as a green light for informal arrangements.

A major factor in the case was how the benefits were treated and recorded. The use of beneficiary accounts and trust distributions helped support the argument that the benefits were linked to ownership, not employment.

Without this level of documentation, the outcome could have been very different.

In practice, this means:

• Clearly recording trust distributions through trustee resolutions
• Ensuring accounting treatment aligns with the intended character of the benefit
• Avoiding inconsistent or mixed treatment across different records

Practical implications for family businesses

The case highlights several practical points that business owners should consider as part of their FBT review:

1. Not all benefits are subject to FBT
Benefits provided to family members in discretionary trusts are not automatically caught. The connection to employment must be clearly established.

2. Review dual-capacity individuals
Where individuals act as both beneficiaries and active workers, their arrangements deserve closer scrutiny. These are the situations most likely to attract ATO attention.

3. Consider how benefits are structured
If a benefit is effectively a substitute for salary, FBT risk increases. If it is genuinely linked to ownership or trust entitlements, the position may be stronger.

4. Don’t ignore other tax risks
Arrangements involving private companies and trusts may also raise issues under other provisions, such as Division 7A.

5. Be prepared for scrutiny
The ATO continues to focus on closely held groups, particularly where there is a mismatch between economic benefits and reported income.

A timely reminder before FBT season

As FBT lodgement deadlines approach, this case is a useful reminder that the rules are not always straightforward—but they are also not as broad as sometimes feared.

The final outcome confirms that FBT does not automatically apply to every benefit provided within a family business structure. However, it also reinforces that each arrangement will be judged on its specific facts, supported by evidence and documentation.

For businesses providing vehicles, expense payments, or other perks to family members—especially in the absence of formal salaries—now is the time to review those arrangements carefully.

Getting it right upfront is far easier than defending it later.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Yvonne Shao @ Pitt Martin Tax

The methodology applied to assets in a business sale valuation – or a partial disposal of one – carries significant consequences for the tax position of parties involved. A ruling by the Full Federal Court, Kilgour v Commissioner of Taxation [2025] FCAFC 183, establishes important judicial guidance on the proper determination of “market value” within the capital gains tax framework.

Practitioners and business owners engaged in sale transactions, structural reorganizations, or succession planning would do well to absorb the Court’s reasoning: tax valuations carry little weight unless they faithfully reflect the commercial circumstances of the transaction rather than resting on abstract assumptions.

Business Sale Valuation: The Facts in Issue

The dispute arose from a 2016 transaction in which three family trusts sold their shares in Punters Paradise Pty Ltd—an online wagering business—to News Corp for approximately $31 million. Shareholding was distributed as follows:

• Pettett Trust: 60%
• Kilgour Family Trust: 20%
• Reuhl Family Trust: 20%

The business sale evaluation proceeded on arm’s length terms, subject to due diligence and included a working-capital adjustment on completion.

Each 20% minority holder sought access to the small business CGT concessions, requiring net assets to remain below a $6 million threshold. They argued that an interest of that size would naturally attract a material discount when assessed independently.

The Commissioner rejected this, contending that each 20% parcel formed part of a unified 100% transaction and should be valued at 20% of the $31 million consideration. The Court upheld this approach.

The Court’s Reasoning on Market Value

The Court reaffirmed the “willing buyer/willing seller” standard from Spencer v Commonwealth, anchoring it in the commercial realities before it. Two significant points emerge.

1. Foreseeable circumstances inform the valuation date

The statutory provisions require value to be assessed “just before” the contract is executed. The Court held that a valuer cannot disregard circumstances within contemplation at that point. As completion was a practical certainty, the negotiated consideration was the most reliable indicator of market value.

A purchaser’s willingness to pay a premium—whether for control, synergies, or strategic positioning—forms part of the valuation context and cannot be excluded.

2. Transactional terms prevail over theoretical discount adjustments

The taxpayers relied on conventional minority discount principles. The Court rejected this as commercially artificial, noting three features:

• The shareholders had agreed to divest simultaneously and as a unified whole.
• The purchaser sought complete ownership, making fragmented acquisitions irrelevant.
• A 100% sale inherently supports the full attributed value of each parcel, regardless of size.

A notional purchaser would have had no rational basis for applying a minority discount. Each interest derived its value from participation in the aggregate transaction. Coordinated disposals can result in interests being valued above what a disaggregated analysis produces.

Business Sale Valuation Considerations for Owners and Advisers

• Minority interests may carry greater value than assumed. Where a purchaser is motivated by control or synergistic benefits, the market value of a modest shareholding may exceed what a mechanical discount suggests. Advisers must ensure the full commercial context informs every business sale valuation exercise.

• Contemporaneous records are essential. Documentation gathered during the transaction—negotiation correspondence, independent valuations, and evidence of the purchaser’s rationale—will be central to substantiating a tax position where CGT concessions are in issue.

• CGT concession eligibility warrants early analysis. Owners intending to rely on small business concessions should review their position before binding steps are taken, including execution of heads of agreement. Structural adjustments may produce different outcomes, though anti-avoidance provisions must be assessed carefully.

• Shareholder expectations must be aligned. Minority holders in private or family enterprises often assume their interests will be assessed in isolation. Kilgour confirms courts examine the transaction as a whole, and collective conduct among co-owners shapes how interests are valued.

Concluding Observations

Kilgour reinforces a foundational principle: a business sale valuation disconnected from genuine commercial conditions is unlikely to withstand scrutiny. Business owners and advisers should engage well before contractual commitments are made, ensuring business sale valuations are properly constructed and documented. Where CGT concessions are at stake, the difference between a defensible and an ill-considered valuation may prove both substantial and irreversible.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

Running a business in Australia is a high-stakes balancing act. Between managing cash flow and chasing growth, it is easy for tax obligations to slip through the cracks. However, a “company problem” can very quickly become a “personal disaster” if the Australian Taxation Office (ATO) issues a Director Penalty Notice (DPN).

Recent data shows a staggering 136% spike in DPNs for the 2024–25 period, with over 84,000 notices sent out. This isn’t just a rounding error; it’s a clear signal that the ATO is ramping up its debt collection. If you are a company director, the firewall between your business debts and your personal bank account might be thinner than you think.

What exactly is a DPN?

At its core, a DPN is a tool that allows the ATO to hold directors personally liable for certain unpaid company taxes. This primarily includes PAYG withholding, GST, and Superannuation Guarantee Charges (SGC).

There are two main “flavors” of DPNs, and knowing the difference is vital:

• Non-lockdown DPNs: These occur when you have lodged your statements on time but haven’t paid the debt. In this case, you usually have a 21-day window to act—whether that means paying the debt, appointing an administrator, or entering liquidation—to potentially avoid personal liability.
• Lockdown DPNs: These are the “danger zone.” If you fail to lodge your returns within three months of their due date (or even sooner for Super), the penalty “locks down.” At this point, even putting the company into liquidation won’t save your personal assets. You are personally on the hook for the debt.

Why the Tax Ombudsman is Stepping In

With DPN complaints reaching an all-time high, the Tax Ombudsman, Ruth Owen, announced a formal review in late 2025. This investigation aims to ensure the ATO is playing fair.

The review is specifically looking at how the ATO selects cases for enforcement and how they communicate with directors. A significant focus will be placed on vulnerable directors—such as those who may have been coerced into their roles or are facing financial abuse. While this review offers hope for a more empathetic tax system, it doesn’t pause the ATO’s current collection efforts.

The Commercial Reality

For a business owner, a DPN is more than just a scary letter; it is a significant commercial risk. Ignoring one can lead to:

• Damaged personal credit ratings.
• Frozen personal bank accounts.
• Potential bankruptcy.

Tax is no longer just “paperwork”—it is a core business risk that requires the same level of attention as your sales strategy or product development.

How to Protect Yourself Today

You don’t have to wait for an Ombudsman report to safeguard your future. Here are the most effective ways to stay out of the ATO’s crosshairs:

1. Lodge, Even if You Can’t Pay: This is the golden rule. Lodging on time prevents a “Non-lockdown” DPN from turning into a “Lockdown” DPN. It keeps your options open.
2. Update Your Address: DPNs are often sent to the address registered with ASIC. If you’ve moved and haven’t updated your records, the 21-day clock could expire before you even see the letter.
3. Prioritize Superannuation: The ATO is particularly aggressive regarding employee entitlements. Ensure SGC statements are lodged and paid as a priority.
4. Act Within 21 Days: If a notice arrives, the clock starts the day it is posted, not the day you receive it. You must consult your accountant or lawyer immediately.

The current environment is a wake-up call. By being proactive and transparent with your lodgments, you can ensure your business survives the current economic dip without sacrificing your personal financial security.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Yvonne Shao @ Pitt Martin Tax

Operating a business from your home—whether as a freelancer, sole trader, or small business owner—offers undeniable convenience. Yet, when it comes to selling your property and minimising tax, the Australian Taxation Office (ATO) has recently clarified some important rules that may affect your plans.

The ATO has outlined its position on how home-based businesses interact with the small business capital gains tax (CGT) concessions. This guidance highlights an area that has long caused confusion among taxpayers.

More details are available here: Home-based business and CGT implications | Australian Taxation Office

The Core Concern: The Active Asset Test

Typically, the sale of your main residence qualifies for a full CGT exemption. However, if you use any portion of your home for business purposes, this could limit the exemption available.

Where the main residence rules do not provide a full exemption, other CGT concessions may apply. These include the CGT discount for assets held more than 12 months and the small business CGT concessions. The latter can potentially reduce—or even eliminate—the capital gain from selling your property, provided certain requirements are met.

One crucial condition is the active asset test. Broadly speaking, to meet this test, the property must have been actively employed in a business for at least 7.5 years of ownership, or for at least half of the ownership period.

The ATO is clear: the test applies to the entire property, not just the section used for business. An asset either satisfies the active asset test or it doesn’t; partial compliance isn’t recognised. Simply maintaining a home office, workshop, or claiming home occupancy deductions does not automatically qualify your home as an active asset. Where business activities are minor or incidental, the small business CGT concessions usually won’t apply.

Case Law: Rus v FCT

The principle that the whole property must qualify as an active asset, and that incidental business use is insufficient, is supported by the Administrative Appeals Tribunal (AAT) case Rus v FCT [2018] AATA 1854. In this instance, a taxpayer attempted to apply the small business CGT concessions on a largely vacant 16-hectare rural property. Less than 10% of the land was used for business—a home office, a shed for storing tools and vehicles, and supplies for a plastering and construction business. The remainder of the land remained vacant or residential.

The AAT upheld the ATO’s decision that the property did not meet the active asset test. The tribunal found that the business activities were not sufficiently integral to the overall property. Minor or incidental use does not render the entire property an active asset, particularly when the main business operations occur off-site. This case underscores the ATO’s strict approach: the property is assessed as a whole. Limited home-based business use is rarely enough to qualify for the small business CGT concessions.

Practical Scenarios

Minor home-based business: Donald operates a hairdressing salon in a spare room, occupying just 7% of her home and seeing clients eight hours per week. She claims occupancy deductions and receives a 93% main residence exemption. Despite this, her limited business use disqualifies her from the small business CGT concessions. The 50% CGT discount may still apply.

Substantial business use: Janet and Frank own a two-storey property where the ground floor runs a takeaway store (50% of total floor space) while the upper floor is their private residence. With decades of continuous business and employees, the property qualifies as an active asset. This opens potential access to small business CGT concessions for the portion of the capital gain not covered by the main residence exemption.

Key Takeaways

• A partial main residence exemption does not automatically grant access to small business CGT concessions. Home office deductions or minor business use are not sufficient.
  
• Consider your home-use plans carefully. Starting a home-based business can affect deductions, CGT calculations, and eligibility for concessions.
  
• Maintain detailed records. Floor plans, hours of business use, and supporting documentation for deductions can strengthen your position for future planning or audits.
  
• Consult your accountant. Professional advice is critical if selling your home is on the horizon, to assess CGT exposure and identify any concessions that may apply.

Conclusion

The ATO’s guidance makes it clear that many home-based business owners will not automatically qualify for small business CGT concessions when selling their home. Eligibility depends entirely on the specific facts and extent of business use.

Being proactive is essential. Understanding how your property is treated for CGT purposes allows you to make smarter decisions. For example, small business profits generated from your home could be significantly reduced if a higher CGT liability arises upon sale. Every dollar matters, whether it contributes to your next venture or your retirement savings.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Zoe Ma @ Pitt Martin Tax

The Australian Taxation Office has released a Preliminary Tax Determination TD 2026/D1 which examines how residential real estate acquired through inherited property CGT is managed. Various sector specialists have labeled this a “hidden inheritance levy,” although the actual situation remains slightly more intricate than that description suggests. This preliminary advice concentrates on one particular facet of the regulations concerning the application of primary residence tax relief to inherited assets, potentially exposing legacy estates and heirs to heavy taxation if not structured correctly.

Below is what you should understand in functional terms.

Why TD 2026/D1 Is Significant

Under existing statutes, legal personal representatives or successors can potentially dispose of a departed person’s previous family residence without incurring inherited property CGT if specific criteria are satisfied. This tax break is exceptionally lucrative for dwellings held over decades, where accumulated paper profits might be immense.

To secure a total tax waiver, you generally must ensure the asset is sold within two years of the passing date (though the Commissioner may potentially prolong this window) or that the home served as the primary dwelling of certain eligible parties from the time of death until the final sale.

These eligible parties might include the surviving partner of the deceased individual, the successor disposing of a stake in the asset, or any person granted a right to reside in the dwelling via the deceased’s final testament.

The preliminary ATO guidance emphasizes this final category. Specifically, it questions what constitutes having “a right to occupy the dwelling under the deceased’s will.” To summarize, the ATO’s interpretation is that:

• The entitlement to inhabit the property must be explicitly bestowed in the testament to a designated person.
• Wide-ranging autonomous powers granted to executors, separate legal pacts, or even testamentary trusts (TTs) are considered inadequate in the Tax Office’s perspective.

For instance:

• A testament granting an executor the choice to permit a member of family to inhabit the residence fails to satisfy this criterion.
• A trustee of a TT who permits a successor to reside in the dwelling is viewed as independent of the testament and might spark inherited property CGT upon disposal.

Various legal and property professionals caution that this could compel households to offload residences within two years of a passing to avoid CGT, particularly in premium locations. Reflect on this: inheriting a $2 million residence with a capital increase of $1.5 million might expose the successors to $300,000–$600,000 in liabilities, depending on available concessions and income brackets.

Nevertheless, it remains vital to recognize that alternative methods exist for the asset disposal to qualify for a complete CGT exemptions.

Practical Strategies to Reduce CGT on Inherited Property

While awaiting the Taxation Office to conclude its advice in this field, there are maneuvers you can execute to shield your household’s wealth:

• Analyze and modify your testament, particularly if you intend to grant specific parties the entitlement to inhabit a dwelling. Does the document currently offer this entitlement to uniquely identified successors?
• Strategize the sale schedule – The two years waiver period persists, but if you receive a dwelling and plan to keep it longer, compare any possible inherited property CGT risk against incoming rental profits or family requirements. Partial CGT exemptions might still be accessible, but the statutes and math can be difficult.
• Consult expert advisors, especially if your legacy strategy utilizes TTs. You will typically need to collaborate closely with tax and statutory consultants to organize the strategy effectively.
• Observe market trends – Estate planning can overlap with market cycles. Rapid disposals might protect CGT exemptions, but this must be balanced against non-tax considerations.

The primary lesson is evident: estate planning is a sophisticated field and must be steered with precision to protect family assets and prevent accidental tax consequences.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

If you are selling a home you have owned for many years, you may be able to contribute some of the sale proceeds into your super using the downsizer contribution rules.

Who can qualify?

To make a downsizer contribution, you must meet several conditions:

• You must be at least 55 years old at the time you make the contribution.
• The property must be located in Australia.
• You must have owned the home for at least 10 years before selling it.
• The sale must qualify for at least a partial main residence capital gains tax (CGT) exemption.
• The contribution must be made within 90 days of settlement.
• You must submit the required election form to your super fund before or at the time the contribution is made.

The downsizer contribution can only be used once per person. The maximum amount is $300,000 each, or the total sale proceeds if lower.

Does the home need to be fully exempt from CGT?

A common misunderstanding is that the property must be completely exempt from capital gains tax. This is not correct.

A full main residence exemption is not required. The property can still qualify even if part of the capital gain is taxable, as long as some of the gain is covered by the main residence exemption and the other conditions are met.

Does it have to be your main residence at the time of sale?

The property does not need to be your main home when you sell it. For example, you may have lived in the property for many years and later rented it out. As long as the ownership history allows you to claim at least a partial main residence exemption, the downsizer rules may still apply.

What about properties purchased before CGT?

For properties acquired before CGT started, special rules apply. In these cases, the test looks at whether the property would have qualified for a main residence exemption if CGT had applied.

Importantly, the property must include a dwelling. Selling vacant land will generally not meet the requirements.

Can a non-owning spouse contribute?

It is common for only one spouse to be listed on the title. A spouse who is not on the title may still be able to make a downsizer contribution if the other eligibility rules are met.

However, if that spouse never lived in the property and could not reasonably treat it as their main residence, they are unlikely to qualify.

Accessing the funds

Once the money is contributed to super, it is subject to normal preservation rules. This means you generally cannot access the funds until you reach age 60 and retire, or until you turn 65.

Before making a decision

Although the rules seem simple, the details matter. Review your personal circumstances and future cash flow carefully before contributing, and seek advice to ensure you meet the requirements.

Pitt Martin Group is a CPA accounting firm, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Australian Society of Certified Practising Accountants (CPA), Australian Taxation Registered Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Angela Abejo @ Pitt Martin Tax

For business owners and investors, spare time is scarce. It is hardly surprising that many people now rely on AI tools such as Chat GPT for quick tax guidance on deductions, super contributions or structural ideas. The responses appear confident, arrive in seconds and cost nothing. What might possibly go wrong? Quite a bit.

Australia’s tax and superannuation environment is detailed, highly dependent on individual facts and subject to constant change. AI technology can be a handy starting point but using it as the basis for real decisions can leave you exposed to reviews, penalties and unintended financial consequences. We are increasingly seeing cases where AI-generated guidance has led clients down the wrong path and requires professional correction.

Where AI Can Assist (and Where It Falls Short)

AI is very capable of explaining simple concepts in everyday language. It can outline what negative gearing involves, describe the difference between concessional and non-concessional contributions, or remind you to think about documentation. Rely in AI tools in tax can save time and help you prepare more focused questions.

The difficulty begins when AI shifts from general explanations to something that resembles advice.

Tax and super outcomes depend on your individual circumstances—your income, business structure, age, residency, assets, timing, and long-term objectives. AI tools do not have access to these factors unless you disclose them, and in most cases you should not. Even when detailed information is provided, they cannot exercise professional judgement or weigh risks and trade-offs in the way an experienced adviser can.

The Accuracy Problem: Authoritative, yet Incorrect

AI platforms are known to “hallucinate”, producing statements that sound convincing but are wrong or incomplete. In practice, this can involve:
• Recommending deductions that are unavailable in your situation.
• Calculating capital gains tax incorrectly or overlooking integrity provisions.
• Suggesting super strategies that exceed caps or failing eligibility tests.
• Citing legislation, cases, rulings or concessions that are outdated or entirely fictional.

To a non-expert these mistakes may be invisible, but they are usually obvious to the ATO, the courts and seasoned practitioners.

A recent decision of the Administrative Review Tribunal highlights these dangers. In Smith and Commissioner of Taxation [2026] ARTA 25, the taxpayer appeared to depend on AI tools to locate authorities supporting their position, and the Tribunal dismissed that approach. Some of the cases were imaginary, while others were irrelevant to the issue at hand.

If the user of the tool fails to confirm the cases exist and read them to check relevance, “the Tribunal’s resources are being wasted, as the Tribunal must look for cases that don’t exist and read cases that have no relevance at all”.

ATO Attention is Increasing, not Decreasing

The ATO is not hostile to AI—they use it themselves for analytics and fraud detection. However, for taxpayers, the ATO’s misinformation guidance makes clear that using AI in tax may deliver false, inaccurate, incomplete or outdated material. Their message is simple: check everything or accept the consequences. Surveys indicate many businesses seek AI accounting assistance first, only to have professionals unravel the problems later, burning extra time and money.

ATO AI transparency statement | Australian Taxation Office

Protect yourself from misinformation and disinformation | Australian Taxation Office

Where inaccuracies are identified, the ATO typically revises the return, charges interest, and may also apply penalties—regardless of whether the mistake arose from misunderstanding or from relying on AI-generated tax information rather than any deliberate action.

This issue is becoming particularly apparent in areas such as working-from-home expenses, rental property claims, and compliance obligations for SMSFs.

Superannuation: High Stakes, Minimal Room for Error

Super is an area where AI suggestions can be particularly hazardous. Self-managed funds operate within strict boundaries. AI frequently misses matters such as eligibility, timing, purpose requirements and investment limits. The consequences can include breaches, forced reversals of transactions and penalties that reach thousands of dollars.

Errors in super can also cause permanent damage to retirement savings.

Data Security and Privacy

There is another practical exposure people often forget: entering personal or financial data into AI systems. Once the information is submitted, control over how it may be stored or used is lost. The privacy and fraud risks are simply not worth accepting.

A Better Way: AI with Professional Guidance

AI delivers the greatest value when used as a research and learning tool rather than as the final authority. It can help build general knowledge, but any significant tax or superannuation decision should be assessed in the context of your full financial position and long-term objectives.

In our practice, we encourage clients to ask questions early, explore potential strategies, and discuss them with us before taking action. Addressing issues upfront is almost always simpler and far less costly than fixing problems after the fact.

The bottom line is straightforward: AI can be useful in tax, but it is not your accountant. When safeguarding your wealth and maintaining compliance, personalized professional advice remains critical.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Sally Tran @ Pitt Martin Tax

Electric vehicles (EVs) have officially shifted from a “niche” choice to a mainstream reality. By late 2025, EVs have captured over 8% of all new car sales in Australia—a massive jump fuelled largely by the Federal Government’s Electric Car Discount introduced in 2022. For many savvy business owners and employees, this policy hasn’t just been a win for the environment; it’s been a massive win for the bottom line.

However, the landscape is shifting. The government has officially launched a statutory review of these incentives. While there’s no need to panic, it is a critical moment to assess your options. Here is a breakdown of what’s happening, why the rules are under the microscope, and how you should navigate the next 12 months.

The Perks: Why Everyone is Going Electric

Currently, the “discount” isn’t a simple cash rebate. Instead, it operates through a series of powerful tax concessions that drastically lower the total cost of ownership:

• The FBT Jackpot: If a business provides an eligible EV to an employee for private use, it is exempt from Fringe Benefits Tax (FBT). Given that FBT is effectively charged at up to 47%, this exemption can slash the annual after-tax cost of a vehicle by thousands of dollars. It’s easily the most significant saving available in salary packaging today.
• The LCT “Green” Ceiling: For the 2025–26 financial year, the Luxury Car Tax (LCT) threshold for fuel-efficient vehicles is $91,387, significantly higher than the $76,950 limit for standard cars. This allows you to purchase a premium EV without triggering a 33% tax on the price difference.
• Import Duty Savings: Many eligible EVs are also exempt from the 5% customs duty, keeping the upfront acquisition price competitive with traditional engines.

Why Is the Government Reviewing the Rules?

In short: the policy was too successful. The uptake of EVs has far exceeded initial forecasts, meaning the cost to the federal budget has grown significantly.

The review is currently digging into whether the market is now strong enough to survive without subsidies, and if eligibility should be restricted to cheaper models. While public consultation is underway, the final report isn’t due until mid-2027. Any changes are likely to be “prospective,” meaning they would apply to future purchases, not the cars already on the road.

Strategy: Your Practical Move

While “review” can sound like a warning, the current rules are still legislated and very much in effect. If you are looking to update your fleet or personal vehicle, here is how to play it:

• Lock in “Grandfathering”: Historically, when tax rules change, existing contracts are “grandfathered.” By entering an arrangement now, you likely lock in the current benefits for the life of the lease, even if the laws change later (although we can’t guarantee this).
• The PHEV Deadline has Passed: Remember that as of 1 April, 2025, plug-in hybrids (PHEVs) are no longer eligible for new FBT-exempt arrangements. To get the big tax wins now, you need to go fully battery-electric or hydrogen.
• Mind the Price Limit: To qualify for the FBT exemption, the car must be below the LCT threshold at the time of purchase. Be careful with expensive optional extras—if they push you over that $91,387 mark, your FBT-free status could vanish instantly.
• Infrastructure Matters: Don’t assume your home charger is part of the deal. The tax treatment of charging infrastructure is distinct from the vehicle, so always check if it qualifies before you sign the paperwork.

The Bottom Line: The Electric Car Discount remains one of the most effective tax-saving tools in Australia. While the 2027 review introduces some long-term uncertainty, the savings today are real. If the numbers stack up for your business, there is little reason to wait.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Yvonne Shao @ Pitt Martin Tax