ATO refreshes private group focus areas for 2025-26

The ATO has refreshed its areas of focus for privately owned and wealthy groups to reflect its priorities for 2025-26.

Its refreshed focus areas for the current financial year included registration, lodgement and payment, reporting, capital gains tax, trusts, Div 7A, lifestyle assets and succession planning.

The Tax Office also noted it would refocus its attention on specific industries or activities such as tax advisers and professional firms, property and construction, private equity, retail, cross-birder transactions, use of tax exempt or concessional taxed entities, retirement villages and GST refund fraud.

According to the ATO, these key areas of focus were based on the risks and issues identified through its intelligence collection, risk detection and analysis and case work.

“While we're focused on improving tax performance across all tax and superannuation compliance obligations for the privately owned wealthy groups population, the following priority areas are where we'll be directing our attention and investing additional resources,” the ATO said.

“While processes and procedures will differ depending on a group’s size, structure and industry, all private groups are expected to maintain appropriate documentation to support their transactions and tax positions.”

The ATO also noted its refreshed focus areas came as a result of changes in the broader operating environment and demographics for private groups.

An increase in tax complexity as private groups grew, diversified, and expanded into new markets or overseas alongside an aging demographic considering succession planning and asset transfers was another factor taken into consideration when the focus areas were revisited.

In terms of what the ATO would be specifically keep tabs on, it was noted it would look to crack down on:

· The use of business money for personal or group purposes with a focus on Div 7A arrangements and the tax treatment of lifestyle assets.

· Tax consequences of succession planning activities where private groups restructure, dispose of assets, transfer wealth or implement arrangements aimed at minimising or avoiding tax.

· Tax risks arising from specific industries or activities such as property and construction, private equity and international dealings.

· Ensured compliance with correctly reported income, sales and capital gains, meeting eligibility requirements and timely lodgment of returns and schedules and payment of tax debts.

The ATO said it was warning private groups to be on top of their compliance obligations and aware of the refreshed focus areas as the Australian community expected multinationals, large businesses and Australia’s wealthiest taxpayers, and the entities they control, to pay the right amount of tax.

“Privately owned and wealthy groups generally have better access to the resources needed to effectively meet their tax and super obligations,” the ATO said.

“Therefore, it's our expectation that they do so, not just to meet their own obligations but to set an example for other taxpayers and increase fairness in the system.”

“We'll continue to work with private groups and their advisers through our tax performance programs to offer tailored support to support voluntary compliance, while ensuring there are consequences for deliberate non-compliance and tax avoidance behaviours.”