1. Announcement
✦We are growing: meet Chloe Plavin, our new Commercial Law Partner ✦
We are delighted to share some exciting firm news. From 1 July 2026, JG Tax and Legal will be opening a dedicated commercial law division, led by Chloe Plavin.
Chloe is an experienced commercial lawyer with broad expertise across private client and business law. Her practice will include (non-exhaustive):
- Wills, estates and succession planning
- Property law (conveyancing, leases, due diligence and advisory/disputes)
- Sale and purchase of business
- Binding financial agreements (i.e., ‘prenups’)
- Entity formation and trust deed amendments
- Shareholders/partnership/unitholder agreements
- Commercial contracts and employment agreements
For the avoidance of any doubt, JG Tax and Legal does not, and will not, offer accounting services or broader business advisory services. That is the expertise of our accounting firm clients and we love leaving you to do what you do best. The aim of our firm is to allow you to provide a more comprehensive offering to your clients by partnering with us.
2. Updates
$19 million in deductions: all denied
The Full Federal Court has unanimously allowed the Commissioner's appeal in Commissioner of Taxation v S.N.A Group Pty Ltd, disallowing approximately $19 million in deductions for service fees paid between related entities after their formal written service agreement had expired.
The Full Court's reasoning was not about whether the fees were commercially fair: it was about whether a legal obligation to pay them could be established at all. The critical element was the expiration of the services agreement which had significant financial consequences for the taxpayer.
This decision may appear harsh, but it is the practical reality given the Full Court’s decision.
Before 30 June, ask yourself in relation to every closely held client group this question: when did you last review the related party service agreements? Are they in place at all?
The SNA decision is not an obscure technical point: it is the ATO successfully arguing that $19 million in payments between related entities did not allow for a deduction because it could not be made out that there was a legal obligation to pay. Management fees, service agreements, shared asset arrangements and inter-entity loans should all have current, signed, written documentation that reflects the current arrangement.
Hall's case: Occupancy cost deductions
The Full Federal Court has allowed the Commissioner's appeal in Commissioner of Taxation v Hall [2026] FCAFC 43, overturning a 2025 Administrative Review Tribunal decision that had permitted an ABC sports presenter to claim deductions for a portion of his rent and car expenses incurred while working from home during COVID-19 lockdowns. The Court held that rent paid to secure domestic accommodation retains its private or domestic essential character regardless of the level of work use: exclusive, employer-mandated use of a room does not change that character. Travel between Hall's home and the Southbank Studios was also held to be non-deductible commuting. The case has test-case funding, so a further High Court appeal remains possible.
The original decision created some optimism that the ATO’s interpretation on work-related expenditure may need to be updated to reflect current working practices.
However, whilst our view is that the law is in need for an update, it is difficult to see how and why this would be forthcoming following this decision.
High fuel costs: ATO support
The ATO published its fuel response on 1 April 2026. The ATO is offering targeted support to eligible businesses unable to meet tax obligations due to high fuel costs, including: streamlined tailored payment plans with no upfront payment required and terms up to 36 months, remission of the General Interest Charge where payment and lodgement conditions are met and assistance with varying PAYG instalments.
If you have clients in transport, agriculture, logistics, or any fuel-heavy industry, there is a narrow window to secure favourable ATO payment terms before 30 June. Be particularly mindful of debts that could be subject to DPNs.
It is highly likely that further concessions and initiatives are administered by the Commissioner, which puts our accounting clients at the front line of assisting struggling businesses.
ATO targets property developer entity structures
The ATO has released Taxpayer Alert 2026/1 (TA 2026/1), flagging property development arrangements in which a special purpose developer entity is interposed between a landholder and a builder under common ownership or control. The developer purports to manage the development under a long-term contract but exists in form only: services are outsourced to the builder, funded by a third party, with minimal or no evidence the developer has genuine operational capacity. Construction costs generate progressive deductions and losses that are then offset against the group's income. The ATO views such arrangements as potentially manipulating the trading stock provisions, deferring income recognition and attracting Part IVA on the basis that the dominant purpose is obtaining a tax benefit. A Practical Compliance Guideline with risk indicators and examples is likely to follow.
If you have a client conducting property development activities with a separately incorporated developer entity, it would be prudent to consider the structure in light of this Taxpayer Alert.
Taxpayer Alerts are typically a reliable indication that the ATO will seek to investigate these arrangements.
This is another example of the ATO seeking to apply Part IVA in the private market.
Changing directors? Stamp duty may now apply
The Victorian Supreme Court has decided Tao v Commissioner of State Revenue that a change in control of the trustee company of a landholding unit trust can trigger a landholder duty assessment under s 82 of the Duties Act 2000 (Vic), even where the beneficial ownership of the land (the unitholders) remains entirely unchanged.
Think twice and seek advice before lodging any ASIC change: a director appointment, a share transfer, or any step that shifts control of a corporate trustee of a landholding entity.
