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1.
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ART affirms interest income assessable on actual receipt
The ART has recently affirmed the position that interest income is assessable on actual receipt in Bennetts v FCT [2025] ARTA 1092, having found that the retired construction worker did not derive interest income until it was actually received. The Tribunal rejected the argument that it had been constructively received by him in earlier years when it was credited or allocated.
The ART found that the determination of entitlement to interest was governed by the relevant trust deed, which, in this case, meant that the taxpayer had no present entitlement to the interest until specific conditions were met.
While the trust deed required the interest to be calculated annually, it did not require the trustee to make an annual determination to apply income to beneficiaries. The ART held that the mere calculation or crediting of interest did not mean the interest was 'applied' on his behalf.
Lastly, on the point of 'constructive receipt' or 'implied direction', the ART distinguished the case from FCT v McNeil [2007] HCA 5, finding that the taxpayer here did not have absolute entitlement to the interest.
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Bennets-v-Commissioner-of-Taxation-ART-Decision.pdf
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2.
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Attempted GST refund fraud on the rise
The ATO is concerned about artificial or contrived arrangements involving entities structured to inappropriately claim GST refunds and have recently published Taxpayer Alert TA 2025/2: Arrangements designed to improperly obtain goods and services tax refunds relating to this issue.
Arrangements the ATO are particularly concerned with involve false invoicing, where entities are established to obtain a benefit from the tax system to which they are not entitled by claiming GST credits for acquisitions they did not make. The corresponding GST liabilities are then either indefinitely deferred or deliberately evaded.
The arrangements of concern usually involve some or all of the following features:
- the supplier and recipient are not dealing at arm's length;
- the supplier and recipient may or may not be part of a larger group of entities, some or all of which undertake genuine business activities;
- false invoicing between related entities, such as inflated invoices or invoices where nothing is actually supplied between the parties;
- deliberate misaligning of GST accounting methods across a group of entities;
- multiple entities within a group claiming a GST credit for the same acquisition; and
- the activity that the purported acquisition is in relation to is not undertaken, nor ever seriously contemplated.
The ATO has indicated that early cooperation and making a voluntary disclosure may reduce the penalties imposed.
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Attempted GST refund fraud on the increase | Australian Taxation Office
TA 2025/2 | Legal database
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3.
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Joint operation exposes major scam syndicate
On 30 July 2025, the ATO, Australian Federal Police and Services Australia, with the assistance of the AUSTRAC, executed a search warrant at four properties across Western Sydney associated with individuals allegedly involved in identity, tax and welfare fraud syndicate targeting innocent Australians.
The alleged fraud involved the distribution of scam emails to Australians which contained links to websites that, when clicked, enabled the fraudsters to gather their personal information and take over their identity.
Multiple devices that contained personal identifiable information and documentation that did not belong to the offenders and allowed the offenders to access taxpayers accounts were found during the search.
Taxpayers are urged to be aware of what information you share and to ever click on a link from a text or email asking for your personal information.
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Joint operation exposes major scam syndicate | Australian Taxation Office
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4.
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How to apply for release of super on compassionate grounds
The ATO has recently updated their guidance on how taxpayers may apply for release of super on compassionate grounds. To be eligible, taxpayers must meet all of the following conditions:
- you are or have been a citizen or permanent resident of Australia or New Zealand;
- you meet the eligibility requirements of the specific compassionate grounds that you're applying for;
- you or your dependants' expenses is unpaid or has been paid as a result of you borrowing money that remains outstanding;
- you can’t afford to pay part or all the expense without accessing your super; and
- you provide all required supporting evidence and invoices or quotes required to show you're in a dependant relationship with someone when you're applying to pay an expense for them.
Common errors when applying
The ATO have outlined some common errors taxpayers make when applying, such as attaching out of date quotes or invoices for unpaid expenses, not providing the right medical reports to support their medical treatment, and applying for release to prevent forced sale of their home for ineligible expenses like personal credit card debt and outstanding rent.
What to expect
Taxpayers may apply for release of super on compassionate grounds online or by paper application. The ATO will assess the eligibility of the taxpayer typically within 14 days for online applications and 28 days for paper applications. If your application is not approved, you may seek to have the decision reviewed.
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How to apply for release of super on compassionate grounds | Australian Taxation Office
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5.
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Annual self-review lodgement requirement for NFPs expected to remain
The Government has issued its response to the Senate report examining the requirement for certain not-for-profit (NFP) organisations to submit an annual NFP self-review return, which serves to confirm their eligibility to self-assess as exempt from income tax.
NFPs that are not registered charities are required to submit these annual returns to the ATO as part of their self-assessment process for income tax exemption. In contrast, charitable NFPs that are registered with the Australian Charities and Not-for-profits Commission (ACNC) are exempt from this requirement, as they already file an annual information statement with the ACNC.
The sector raised concerns about the added administrative burden of this obligation, prompting the Senate to refer the matter to the Senate Economics References Committee. The Committee released its findings in late 2024, including five recommendations.
The Government has since responded to the report, generally acknowledging the recommendations without committing to any substantive changes. As a result, significant reform in this area appears unlikely.
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Australian Government response – Senate Economics References Committee final report: NFP entities—Tax assessments | Treasury.gov.au
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6.
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ATO letters often found confusing and lack empathy says the Tax Ombudsman report
Tax Ombudsman Ruth Owen has released the final report on her review of ATO letters, prompted by community concerns that some communications are overly technical, unclear, or unnecessarily harsh, causing taxpayer stress. The review followed backlash to the ATO’s 2023 “debts on hold” campaign and focused on improving how bulk letters are created and delivered.
The Ombudsman found that, despite the ATO’s existing processes, some letters remain complex and lack empathy.
The report sets out four key recommendations, all accepted by the ATO:
- Improve letter design processes: Clarify roles, processes, and escalation pathways; enhance collaboration between business and communications teams; and update templates with standard support info for diverse and disabled taxpayers.
- Strengthen user testing: Develop a clear framework for when and how to test letters, including culturally and linguistically diverse participants, with guidelines on timing, funding, and feedback validation.
- Gather and use feedback: Implement tools to collect feedback on clarity, use data to identify confusing letters driving call volumes, and periodically review templates based on complexity and usage.
- Respect communication preferences: Promote correct use of taxpayer communication preferences and review how they’re applied across all templates, ensuring they’re followed unless there's a clear reason not to.
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Review: Letters from the ATO – Tax Ombudsman
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7.
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CGT event K6: disposal of pre-CGT shares or trust interests
On 23 July 2025, the ATO released an Addendum to TR 2004/18, the ruling on CGT event K6.
CGT event K6 acts as an anti-avoidance rule to stop pre-CGT entities from being used to hold or accumulate post-CGT assets. It is triggered when a CGT event occurs involving a pre-CGT interest in a company or trust, and post-CGT assets make up 75% or more of the entity’s net value.
The Addendum updates the ATO’s interpretation, clarifying that only one capital gain can arise under CGT event K6, even if both the direct post-CGT property and indirect interests via interposed entities separately meet the 75% threshold.
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TR 2004/18A1 - Addendum | Legal database
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