Explain That by Velocity Legal

Does the proposed increase to the turnover threshold really make the small business CGT concessions more accessible?

From 1 July 2027, the aggregated turnover threshold is proposed to increase from $2 million to $10 million for access to the 50% active asset reduction. But the change is narrower than the headline suggests. The higher threshold does not extend to the 15-year exemption, retirement exemption or small business rollover, and the practical benefit may depend heavily on the taxpayer’s ownership structure and how the business is sold.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Ani Tuna to discuss the proposed expansion of the small business CGT concessions, who is most likely to benefit and why important limitations remain.

The discussion covers:

• the existing turnover and maximum net asset value gateways for the small business CGT concessions;

• the proposed increase from $2 million to $10 million for access to the active asset reduction;
• why the higher turnover threshold applies to only one of the four concessions;
• which businesses within the $2 million to $10 million turnover range are most likely to benefit;
• the conditions that must still be satisfied, including the active asset test;
• why the outcome may differ between an asset sale and a share sale;
• why passive shareholders may be unable to rely on the expanded turnover gateway;
• the difficulty of extracting sale proceeds from a company after applying the active asset reduction;
• unfranked dividends, members’ voluntary liquidations and shareholder-level CGT consequences;
• similar extraction issues for unit trusts, including CGT event E4; and
• why the transaction structure and ultimate distribution of the proceeds should be considered before a sale proceeds.

A practical discussion for business owners, accountants, tax advisers and private groups considering a business sale, share sale, asset sale or claim under the small business CGT concessions.

For advice on the expanded active asset reduction, small business CGT concession eligibility or the tax structure of a proposed transaction, contact Ani Tuna or Velocity Legal’s Tax team.

The proposed 30% minimum tax on discretionary trusts has moved from a Federal Budget announcement to exposure draft legislation, bringing greater detail—and considerably more complexity.

In this episode of Explain That, Andrew Henshaw is joined by Velocity Legal director Rajan Verma to examine how the proposed regime would operate, how the trustee-level tax and beneficiary credit would interact with the existing trust taxation rules, and why the changes could materially affect the use of discretionary trusts by families and private businesses.

The discussion also explores the proposed Excluded Election Trust regime, or EET. The election may allow an existing discretionary trust to remain outside the minimum tax by nominating beneficiaries and fixing their respective shares of trust income and capital. Rajan explains why that apparent solution may create its own problems, including a loss of flexibility, potentially severe consequences if the nomination is breached, and unresolved questions about trust law and transfer duty.

Andrew and Rajan also consider the proposed restructuring rollover, the potential state duty costs of moving assets or businesses out of a trust, the treatment of franking credits and corporate beneficiaries, and the difficult timing decisions facing trustees and advisers before the proposed commencement date.

The discussion covers:

• how discretionary trusts are currently taxed as flow-through vehicles;
• how the proposed 30% trustee-level minimum tax and non-refundable beneficiary credit would work;
• the potential effect on lower-taxed beneficiaries and corporate beneficiaries;
• exclusions for genuine discretionary testamentary trusts and certain classes of income;
• the operation and limitations of the proposed EET regime;
• rollover relief, transfer duty and the practical costs of restructuring; and
• why trustees may need to begin planning before the final policy and political position is known.

The exposure draft was released on 3 September 2026. Treasury describes the proposed regime as applying from 1 July 2028, with a fixed-distribution election and three years of rollover relief from 1 July 2027.

Do you need to pay GST on a one-off property development?

For small-scale property developments, GST can materially affect the sale proceeds. A one-off project can still attract GST, and treating a sale on capital account for income tax purposes does not necessarily resolve the GST position.

In Part 2 of this two-part series on tax and property development, Andrew Henshaw is joined again by Tom Warrington, Associate in Velocity Legal’s Tax team, to discuss the GST implications and why they need to be considered before signing a contract.

The discussion covers:

• when a property sale may be a taxable supply;

• what constitutes an enterprise for GST purposes;

• why a one-off development can still attract GST;

• how the GST analysis differs from the revenue versus capital distinction;

• GST withholding obligations and notifying the purchaser;

• how the margin scheme may reduce GST payable and the requirement for written agreement;

• the distinction between existing and new residential premises;

• why a property’s physical characteristics matter when assessing its residential character;

• the relevance of rental periods and the five-year rule for new residential premises; and

• when changes in use or an input-taxed sale may require adjustments to previously claimed GST credits.

A practical discussion for property owners, small-scale developers, accountants and advisers considering the GST consequences of property development.

Part 1 examines the income tax and CGT implications, including the revenue versus capital distinction, the taxpayer’s intention and the importance of supporting evidence.

For advice on the tax treatment of property developments, contact Tom Warrington or Velocity Legal’s Tax team.

Is your property development profit taxed as a capital gain or as income?

For small-scale property developments, that distinction can materially change the tax outcome. A one-off development is not automatically treated on capital account, and whether the CGT rules apply can depend on the taxpayer’s intention, the nature of the development and the evidence supporting their position.

In Part 1 of this two-part series on tax and property development, Andrew Henshaw is joined by Tom Warrington, Associate in Velocity Legal’s Tax team, to discuss the revenue versus capital distinction and why it matters.

The discussion covers:

• when a property sale may be treated as the mere realisation of a capital asset;
• when a development may instead be treated as a profit-making undertaking or scheme;
• why a one-off development can still be taxed on revenue account;
• the importance of the taxpayer’s intention when acquiring the property;
• the factors that may give a development a commercial character;
• the role of contemporaneous evidence in supporting a taxpayer’s position;
• the Morton case and its relevance to the capital versus revenue distinction;
• what can happen when a taxpayer’s intention changes over time; and
• why documenting a change in intention can become particularly important where a property is sold soon after development.

A practical discussion for property owners, small-scale developers, accountants and advisers considering the income tax and CGT consequences of property development.

Part 2 turns to the GST implications of small-scale property developments, including taxable supplies, the enterprise test, the margin scheme and new residential premises.

For advice on the tax treatment of property developments, contact Tom Warrington or Velocity Legal’s Tax team.

What is a heads of agreement, and is it legally binding?

Heads of agreement are commonly used at the beginning of a business sale, acquisition or other commercial transaction to record the key terms before a formal contract is prepared. Although they are often treated as preliminary or non-binding documents, poor drafting can create legal obligations, restrict negotiations and affect a party’s position before due diligence is complete.

In this episode of Explain That by Velocity Legal, Lauren Gross, Senior Associate in Velocity Legal’s Commercial team, discusses how heads of agreement work, when they should be used, and the legal and commercial risks businesses should consider before signing one.

The discussion covers:

• what a heads of agreement is;
• the difference between heads of agreement, term sheets, memoranda of understanding and non-binding indicative offers;
• when a heads of agreement may be legally binding;
• which provisions are commonly binding, including confidentiality and exclusivity;
• the role of due diligence before and after a heads of agreement is signed;
• the risks of agreeing to a purchase price before due diligence is complete;
• how exclusivity periods operate in business sale negotiations;
• termination provisions and what happens if negotiations break down;
• who should prepare the formal sale agreement;
• how heads of agreement can help manage transaction timelines and deal fatigue; and
• the Victorian Court of Appeal decision in Delaney v Delaney and what it demonstrates about binding preliminary agreements.

The episode also considers when a heads of agreement may not be necessary and when proceeding directly to a formal contract may be more efficient.

A practical discussion for business owners, accountants, advisers, buyers and sellers involved in business sales, acquisitions, share sales or other commercial transactions.

For advice on heads of agreement, business sales, acquisitions or commercial contracts, contact Velocity Legal’s Commercial team.

Most taxpayers assume that once the usual amendment period has passed, an old tax assessment is effectively closed. A fraud or evasion opinion can change that.

For many taxpayers, the ATO generally has either two years or four years to amend an income tax assessment. But if the Commissioner forms the opinion that there has been fraud or evasion, those ordinary time limits may fall away, allowing the ATO to revisit much older income years.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Tyson Bateman to discuss what fraud or evasion means in Australian tax law, why these allegations can change the course of an ATO dispute, and what taxpayers should consider when the ATO raises concerns about older assessments.

The discussion covers:

• the ordinary two-year and four-year amendment periods;
• why fraud or evasion can allow the ATO to amend outside those time limits;
• the difference between an incorrect tax position, evasion and fraud;
• why evasion can be difficult to identify in practice;
• how the ATO forms a fraud or evasion opinion;
• the Administrative Review Tribunal’s decision in Kirtlan and Commissioner of Taxation;
• reliance on accountant advice in tax residency disputes;
• why advisers need to be fully informed before advice is relied on;
• the importance of records, emails and contemporaneous evidence; and
• why engaging with the ATO before an amended assessment is issued can matter.

This episode is useful for taxpayers, business owners, private clients, accountants and advisers dealing with ATO audits, tax residency issues, amendment period disputes or fraud and evasion allegations.

For advice on an ATO audit, tax dispute, fraud or evasion allegation, amendment period issue or tax residency dispute, contact Velocity Legal’s Tax team.

What happens when the business you bought is not what you were told it was?

Business sale disputes often arise when a purchaser believes they relied on inaccurate, incomplete or misleading information before settlement. Whether the issue involves overstated profits, undisclosed liabilities, inaccurate financial records or the loss of a key customer, misleading or deceptive conduct claims can have significant consequences for both buyers and sellers.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Jess Hill and Leo Crnogorcevic to discuss misleading or deceptive conduct in business sales, how these claims arise, and the practical steps parties can take to reduce the risk of a dispute after completion.

The discussion covers:

• what misleading or deceptive conduct means in a business sale;
• how statements, omissions and silence can create risk;
• common disputes involving profits, liabilities, customers and financial information;
• the difference between misleading conduct claims and breach of warranty claims;
• the role of due diligence and “buyer beware” principles;
• how courts assess reliance and loss;
• why disclosure matters before signing a business sale agreement; and
• practical steps buyers and sellers can take before settlement.

A practical discussion for business owners, purchasers, vendors, accountants, brokers and professional advisers involved in buying or selling a business.

For advice on buying a business, selling a business, business sale disputes, misleading or deceptive conduct claims or commercial litigation, contact Velocity Legal’s Commercial and Disputes teams.

What does Payday Super mean for Australian employers?

From 1 July 2026, Australian businesses are required to manage superannuation guarantee obligations much more quickly than under the previous quarterly payment system. Employers generally need to ensure superannuation contributions are received by an employee’s super fund within seven business days of payday, rather than being paid after the end of each quarter.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Ani Tuna and Nick Viergever to discuss the Payday Super reforms, the compliance risks for employers, and the practical issues businesses and advisers should be reviewing under the new regime.

The discussion covers:

• how Payday Super changes the timing of superannuation guarantee payments;
• why the reforms are about more than simply paying super more often;
• payroll, cash flow and administration issues for employers;
• transition risks from the June 2026 quarter into the new Payday Super regime;
• how payment allocation issues may create unexpected compliance problems;
• increased ATO visibility through payroll and reporting systems;
• director penalty risks where superannuation obligations are not met;
• clearing house processing delays and the closure of the ATO Small Business Superannuation Clearing House;
• why contractor arrangements still need to be reviewed; and
• the continued role of SGC statements for historic unpaid superannuation obligations.

A practical discussion for business owners, employers, directors, accountants, bookkeepers and professional advisers preparing for the operational and compliance impact of Payday Super.

For advice on Payday Super, superannuation guarantee compliance, historic unpaid superannuation liabilities, contractor arrangements or director penalty risks, contact Velocity Legal’s Tax team.

What happens when a family trust distribution falls outside the family group?

Family trust distribution tax, or FTDT, is rapidly becoming a major risk area for private groups, trustees and advisers. The consequences can be severe, particularly where historic trust arrangements, family trust elections or interposed entity elections have not been reviewed for many years.

In Part 2 of this Explain That series, Andrew Henshaw is joined by Special Counsel Ani Tuna to discuss family trust distribution tax, how FTDT is triggered, and why these issues are now emerging in ATO reviews, audits and disputes.

The discussion covers:

• how family trust distribution tax is triggered;
• the relationship between family trust elections and FTDT;
• distributions outside the relevant family group;
• interposed entity elections and common structuring mistakes;
• the Thomas family case and the reported $13 million FTDT liability;
• why historic trust structures are under increasing ATO scrutiny;
• how genuine administrative errors can create severe tax liabilities; and
• practical issues now emerging in ATO reviews and disputes.

This episode is designed for accountants, tax practitioners, advisers, trustees and private groups dealing with discretionary trusts, family trust elections, interposed entity elections and historic trust structures.

For advice on family trust elections, interposed entity elections, trust distributions or family trust distribution tax, contact Velocity Legal’s Tax team.

What is a family trust election, and why does it matter?

Family trust elections are one of the most misunderstood areas of private group taxation. Originally introduced to address trust loss trafficking, they now affect a much broader range of tax issues, including trust losses, company losses, franking credits and small business restructures.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Special Counsel Ani Tuna to discuss family trust elections, why these rules exist, and why historic trust structures are now receiving closer attention from the ATO.

The discussion covers:

• what a family trust election is;
• why family trust elections were introduced;
• how the family group rules operate;
• the role of the test individual;
• why family trust elections are now commonly required;
• retrospective family trust elections and the risks involved;
• why identifying historic elections can be difficult; and
• common assumptions and mistakes made by trustees, advisers and private groups.

This episode lays the foundation for Part 2, where the discussion turns to family trust distribution tax and the significant liabilities that can arise when these rules are misunderstood.

A practical discussion for accountants, tax advisers, trustees and private groups dealing with discretionary trusts, family trust elections, interposed entity elections or historic trust structures.

For advice on family trust elections, trust distributions or family trust distribution tax, contact Velocity Legal’s Tax team.