Under the ATO’s Lens: What’s Changing in 2025-26 and How It Affects You
The Australian Taxation Office (ATO) has outlined its compliance priorities for the 2025-26 financial year, signalling a clear focus on privately owned businesses, family groups, and wealthy individuals. The key message is that the ATO is increasing its use of data-matching to ensure compliance.
For business owners and professionals, this isn't about memorising tax law. It's about understanding the key risk areas so you can build, grow, and protect your wealth without costly surprises.
The 60-Second Summary: What's in Focus?
The ATO's focus isn't just on complex international tax schemes; it's on the very structures and transactions successful businesses use every day.
Your Structures: Trusts, company loans (Div 7A), and distributions are being closely reviewed. The ATO wants to ensure the economic reality of these transactions matches the paperwork.
Your Big Moves: Selling a business, transferring wealth (succession), or restructuring? The ATO is checking the details, especially around eligibility for concessions.
Your Data: The ATO is data-matching across many areas—from crypto trades to property sales and GST. Discrepancies are more likely to trigger a review.
The ATO's 2026 Focus Key Areas
We've translated the ATO's technical bulletin into the business-relevant questions you need to ask.
1. Your Business Structures: Are They Clear and Compliant?
This remains a primary focus for the ATO. They are closely reviewing arrangements to ensure they are not set up just to minimize tax.
Trusts: Are you making distributions to lower-tax beneficiaries (like adult children or a company) while the "real" economic benefit flows to someone else (like the parents)? This is a major area of review (Section 100A).
Company Loans (Division 7A): This is a perennial challenge. Are you taking money out of your company as a "loan"? The ATO is looking for correct paperwork, complying agreements, and ensuring repayments are made correctly.
Family Trust Distributions: The ATO is concerned business owners may not be aware of the significant Family Trust Distribution Tax that can apply when distributions are made outside the defined "family group."
Something to Think About:: "Would my trust and company loan arrangements be clear and easy to understand in a review? Is all my paperwork in order?"
2. Your Big Transactions: Selling & Succession
The ATO understands that the biggest tax implications often happen during major transactions.
Selling Your Business (CGT Concessions): Are you claiming small business CGT concessions? The ATO is actively reviewing these claims to ensure all complex eligibility rules are met. They are particularly interested in restructures done just before a sale.
Succession Planning: As you plan to transfer wealth or control, the tax implications are massive. The ATO sees groups facing unexpected tax bills due to a lack of planning. Moving assets, settling old loans, and using trusts to transfer wealth must be planned with care.
Ask Yourself: "When I sell or exit, am I confident I’ve met every condition to claim concessions? Is my succession plan tax-effective?"
3. Your Assets & Operations: Clear Lines
The ATO is using data to identify mismatches between a taxpayer's activities and their reported income.
Lifestyle Assets (Boats, Cars, Property): The ATO is looking for instances where a private hobby is mischaracterised as a "business" to claim deductions. They are also checking that assets owned by the company but used privately are treated correctly for FBT and Div 7A.
Property & Construction: This industry remains a key focus. The ATO is watching for misclassification of property (capital vs. revenue), GST errors on sales (especially the margin scheme), and non-lodgement of reports.
Crypto Assets: This is now a mainstream focus. The ATO is data-matching transactions from exchanges and looking for incorrectly reported (or entirely omitted) capital gains and business income.
International Dealings: As your business grows overseas, the complexity multiplies. The ATO is focused on related-party financing (loans between your entities), intangibles (like software), and whether you've correctly disclosed all your international dealings.
Checkpoint: "Are my operations clean? Am I correctly separating business from private, and am I reporting all income, including from property and crypto?"
4. The Fundamentals: Keeping Your House in Order
It's not all high-level strategy. The ATO is also focused on fundamental compliance.
Basic Obligations: Failing to lodge or pay on time is the easiest way to attract ATO attention.
Reporting Errors: Simple mistakes like claiming the wrong company tax rate or over-claiming GST credits are being identified through data analytics.
GST Fraud: The ATO has a strong focus on artificial or "round-robin" transactions within a group, designed purely to generate a GST refund.
Practical Question: "Are my internal controls and bookkeeping strong enough to prevent simple (but costly) errors?"
Your 3-Step Action Plan
As a successful business owner, you have the resources to manage tax obligations effectively. The ATO's expectation is that these are met.
Review Your Governance: Now is the time to ensure you have a robust system. How do you document decisions? Are your loan agreements, trust minutes, and logbooks up to date? Good governance is your best defence.
Stress-Test Your Structures: Engage a professional to look at your structures with the ATO's "focus list" in mind. Would your trust distributions pass a review? Is your Division 7A loan agreement compliant?
Plan Big Moves Early: If you are considering a business sale, restructure, or succession plan, do not leave the tax advice until the last minute. The biggest financial mistakes are made when tax is an afterthought, not part of the initial strategy.
Navigating this landscape isn't about fear; it's about preparation. By understanding where the ATO is looking, you can proactively manage your risk, protect your assets, and continue to build your wealth with confidence.
If you’re a business owner, director or advisor of a privately-owned group, now is not the time to wait. Use this insight to review your structures, transactions and governance — and ensure they’re robust before the spotlight hits. If you’d like expert support to stress-test your trusts, company loans or succession plan against the Australian Taxation Office’s 2025-26 priorities, get in touch with our team today and we’ll help you map the path, fix the weak points, and keep your wealth-building on track with full confidence.