Navigating the End of the Financial Year: Your 2026 Tax and Planning Guide

As the end of the 2026 financial year approaches, taking proactive control of your tax positioning is more critical than ever. Navigating upcoming compliance deadlines, understanding shifting legislative frameworks, and maximising available incentives require careful preparation before the 30 June threshold arrives. This comprehensive guide outlines the essential actions and strategic considerations for businesses, individuals, and investors to optimise their tax outcomes for the 2026 financial year while effectively planning for the road ahead.

Key Deadlines to Act On (Before 30 June 2026)

To secure your tax deductions for the 2026 financial year, ensure the following actions are completed, cashflow permitting:

Employee Superannuation (Xero Users): Pay by 12 June 2026 to ensure funds clear into the employee’s superfund account by 30 June.
Employee Superannuation (MYOB / ATO Clearing House Users): Pay by 19 June 2026.
Personal Super Contributions: Pay by your fund’s specific deadline, which is often 19 June 2026, or 12 June 2026 if using Xero to ensure it clears by Tuesday, 30 June.
Contractor Reporting: If your business is in building and construction, cleaning, road freight and courier, information technology, or security, investigation or surveillance services, your report is due by 28 August 2026.

Business Tax Planning and Compliance

Instant Asset Write-Off and Depreciation

$20,000 Threshold: Small businesses with an aggregated turnover of less than $10 million can immediately write off eligible assets costing up to $20,000. These assets must be first used or installed ready for use before 30 June 2026.
Assets over $20,000: Assets valued above $20,000 that cannot be immediately deducted will be placed into the small business simplified depreciation pool. These assets will depreciate at a rate of 15% in the first income year and 30% each subsequent income year thereafter. Therefore, any assets costing more than $20,000 that are acquired by a small business before 30 June 2026 will be eligible for a 15% deduction in the first year.
Proposed Extension: The Government has recently announced a proposal to make the $20,000 threshold permanent from 1 July 2026, but that proposal is not yet law.
Leasing Restrictions: Assets acquired by group entities which merely lease the assets to other group business entities or unrelated parties may not be eligible to apply the concession.

Essential Year-End Checklists

Bad Debts: Ensure any eligible bad debts are written off correctly through your accounting software or the decision to write them off is documented correctly in a director’s resolution.
Stocktake and WIP: Ensure a full stocktake is carried out, including scrapping obsolete stock. Review your WIP to include only legally recoverable or billable amounts.
R&D Tax Incentives: If intending to claim for eligible R&D expenditure, total expenditure or deductions must exceed $20,000 in general. Registration with the Government Department must be within 10 months of the end of the income year and prior to lodgement of the tax return.
Small Business Tax Concessions: Businesses that are small business entities with a group-wide turnover below $10 million may qualify for multiple concessions in the 2026 income tax year. These include an immediate deduction for depreciation assets costing less than $20,000, small business restructure rollover, immediate deduction for start-up costs, immediate deduction for certain prepaid expenses, simplified trading stock rules, simplified PAYG tax instalment rules, cash basis accounting for GST, ATO-calculated GST instalments, and FBT exemption for car parking and providing multiple portable electronic devices such as laptops and mobile phones.

Major Systems and Policy Changes

Small Business Clearing House Closure: The Small Business Superannuation Clearing House (SBSCH) will close permanently from 1 July 2026 as part of the Payday Super reform and is no longer accepting new registrants. Existing registered users can continue to use the service only until 11:59 pm AEST on 30 June 2026. Current users will need to select an alternative Super Guarantee payment method, transition before 1 July 2026, and download all SBSCH super records before closure. Alternatives include super-payment functionality within existing payroll software, other providers listed on the SuperStream Product Register, online payment services offered by some large super funds, or a commercial clearing house. To reduce the risk of disruption or late payment, particularly for the April to June 2026 quarter, it is recommended that the January to March 2026 quarter be the last quarter in which SBSCH is used.
Payday Super Reform: From 1 July 2026, Payday Super changes the way employers calculate, pay and report Super Guarantee (SG) by requiring SG contributions to be paid on payday, at the same time as employees’ salary and wages. According to the ATO currently, payments must be received by the employee’s super fund within 7 business days, with limited exceptions. SG will continue to be calculated at 12%, but it will apply to qualifying earnings (QE), a new term that consolidates ordinary time earnings and other relevant payments for SG purposes. Payday Super increases payment frequency and tightens timeliness expectations, including expanded Single Touch Payroll (STP) reporting so employers report both QE and SG liability. The Super Guarantee Charge (SGC) will apply if contributions are not received within the new 7 business day timeframe, with the ATO assessing the SGC and calculating it based on QE, including compounding interest and an administrative uplift.
Single Touch Payroll: All employers are now required to run their payroll and pay their employees through accounting and payroll software that is Single Touch Payroll (STP) ready. If you are still having STP issues, please get in touch with us so that we can get you to be STP compliant.

Individuals, Investors and Trusts

Personal Superannuation Strategies

Deduction Cap: Both employees and self-employed individuals can claim a tax deduction annually to a maximum of $30,000 for personal superannuation contributions, provided the superannuation fund has physically received the contribution by 30 June 2026 and the individual has provided their superannuation fund with a notice of intention to claim. Employees can also top-up their employer’s superannuation guarantee contributions to the $30,000 limit and claim a tax deduction in their personal tax return.
Concessional Cap Calculation: You will need to subtract from the threshold any employer superannuation, including super guarantee, that would have been physically paid to your respective funds in the 2026 financial year when calculating the remaining concessional cap of $30,000. You are able to claim a full deduction for eligible personal super contributions you make to your superfund, and you do not need to do this through salary sacrifice, even if you receive employment income. Payments should be made sufficiently in advance of 30 June to ensure they are credited to the fund’s bank account by 30 June, otherwise the deduction will be deferred to the next income year. To claim a deduction, you must give your fund a valid notice of intent to claim and receive the fund’s acknowledgment before the earlier date of lodging your 2026 tax return or 30 June 2027.
Carry-Forward Unused Caps: If your superannuation balance is below $500,000 as at the previous 30 June, you can contribute more to superannuation than the annual $30,000 deductible contribution cap, where your contributions in prior years were below the concessional contribution cap of that year. You can carry forward unused concessional contribution caps for 5 years from FY2020. Any unused caps from FY2021 that are not used by 30 June 2026 will be lost after that date.
Downsizer Scheme: The eligibility age for the Downsizer Scheme was lowered from 60 to 55 years on 1 January 2023. The Downsizer Scheme allows eligible people who sell their home to make a one-off, $300,000 contribution to their super, outside the concessional and other rules. Couples can contribute $300,000 each. The property must have been owned by the taxpayer for at least 10 years prior to sale and must be eligible for the CGT main residence exemption, either in full or partial exemption.
First Home Super Saver Scheme: A first home buyer can contribute a maximum of $15,000 a year, while taking care not to breach the $30,000 concessional contributions cap, to save for a deposit to buy a first home. The maximum amount that can be saved in such a way is $50,000 across all years. Provided the buyer’s partner does not already own his or her first home, the couple can put in a maximum of $100,000 to buy a first home. Money saved in this way can only be withdrawn from the superannuation fund with strict rules applying on how to use such withdrawn money. Withdrawn funds are subject to income tax withheld at your marginal rate, less a 30% offset, and must be included as assessable income in your income tax return for that year along with the tax withheld.

Deductions and Travel Claims

The Three Golden Rules: Although a myriad of tax law considerations is involved when claiming work-related expenses, the three main rules are that you can only claim a deduction for money actually spent and not reimbursed, the work-related expense must directly relate to the earning of income, and you must have a record to prove the expense. Any items purchased for more than $300 will be claimed over the life of the item, rather than immediately in the year of purchase. Taxpayers who are over-claiming work-related expenses such as vehicle, travel, internet and mobile phone, and self-education are on the ATO’s hit list.
Motor Vehicle Records: If you claim a tax deduction for work related motor vehicle expenses, you should note your odometer records at 30 June each year so that you can calculate the kilometres travelled. Maintaining a logbook of work-related use of your vehicle will usually maximise the tax deduction you can claim. If your current logbook is 5 years old you will need a new one for a continuous 12 week period.
Working From Home (WFH): The ATO has two methods to calculate a working from home claim. The Fixed rate method allows a claim of 70c for each hour you work from home which covers energy expenses, internet expenses, mobile and home phone expenses and stationery and computer consumables, while other costs such as depreciation for work related use of office furniture can be claimed separately. The Actual cost method allows individuals to claim deductions for the actual additional expenses incurred while working from home, including expenses for depreciating assets like home office furniture and computers, electricity and gas for heating, cooling, and lighting, and home and mobile phone expenses. Alternatively, the actual work-related portion, calculated for all running costs, continues to be available as usual.

ATO Trust and Professional Firm Focus

Discretionary Trusts (Section 100A): Of key importance is the requirement for trustees of discretionary trusts to consider how best to distribute trust income and capital for the 2026 year to eligible and appropriate beneficiaries. Longstanding anti-avoidance rules in section 100A of the tax act can apply where trust income is appointed on paper to a beneficiary on a lower tax rate, but someone else gets the benefit of the underlying funds. The ATO has embarked on a compliance program with renewed focus on administering these rules, with a particular focus on appointing trust income to family members with lower tax rates. There is an exclusion from these anti-avoidance rules where arrangements are entered into in the course of ordinary family or commercial dealings. The ATO has issued rulings and guidelines setting out their views on these rules, and trustees ought to have regard to the ATO’s views when making decisions on their appointment of trust income leading up to 30 June 2026 and beyond. We can provide guidance in relation to your particular circumstances to ensure you are making fully informed decisions.
Allocation of Professional Firm Profits: The ATO has instigated a program for determining when they will likely review the tax arrangements of professionals and possibly progress to an audit. The issue in the ATO’s sights is whether an equity holder in a professional firm is taxed on a sufficient amount of their profit share from their firm themselves. The ATO’s Practical Compliance Guideline PCG 2021/4 sets out the ATO’s approach to overseeing tax compliance amongst owners of professional firms in the fields of accounting, architecture, engineering, financial services, law, medicine, management consulting and others. The new guidelines apply from 1 July 2024, setting out eligibility criteria and a risk scoring system. Decisions on the allocation of professional firm profits ought to take into account the ATO’s compliance approach.

Key Legislative and Budget Changes

Critical Alert: Non-Deductibility of ATO Interest

General interest charge (GIC) and shortfall interest charge (SIC) imposed on government debts are not tax deductible from 1 July 2025. We recommend you review and consider your tax debt arrangements with the ATO as it may be more tax effective to finance your tax debts through external financiers. The ATO has also significantly tightened up on GIC remission requests to the stage where it is very difficult to get any remission request granted.

Proposed Negative Gearing Reforms (2026 Budget)

The Proposal: The 2026 Budget proposes significant changes to negative gearing arrangements for residential property investments. If the proposal becomes law, from 7:30pm AEST on 12 May 2026 (Budget night), negative gearing benefits will no longer apply to residential properties acquired after this time, except where the investment relates to new builds. While the rules apply to acquisitions from Budget night, they will only take effect from 1 July 2027.
The Impact: Under current settings, investors can offset net rental losses from negatively geared properties against other taxable income; however, for affected future acquisitions, such losses will instead be quarantined and carried forward to offset future residential property income, including capital gains.
Scope and Exemptions: Properties acquired or contracted prior to Budget night will be grandfathered and retain full negative gearing benefits. The Government has preserved negative gearing for new builds to encourage housing supply, and further exemptions may be available for private investors participating in government housing initiatives. These changes will apply broadly across individuals, partnerships, companies and most trusts, but will exclude widely held trusts and superannuation funds, including SMSFs. Importantly, the reforms are limited to residential property and do not extend to other negatively geared assets such as commercial property or shares.

Proposed Capital Gains Tax (CGT) Changes

The Proposal: From 1 July 2027, the Government proposes replacing the current 50% capital gains tax (CGT) discount for individuals, trusts, and partnerships with a regime based on cost base indexation and a minimum 30% tax rate on capital gains. Under the proposal, CGT assets acquired and disposed of before 1 July 2027 will remain fully subject to existing rules, while assets acquired on or after that date will be entirely governed by the new regime.
Transitional Rules: For assets held prior to 1 July 2027 and disposed of thereafter, transitional provisions will apply, with gains accrued up to 1 July 2027 taxed under the current system and gains arising from that date taxed under the new rules, with no tax consequences arising until disposal. For these transitional assets, the 50% CGT discount will apply to the increase in value from the original cost base to the asset’s value at 1 July 2027. Any subsequent gains will be calculated using indexation, with the asset’s value at that date effectively establishing a new cost base, and the resulting post-1 July 2027 gain subject to a minimum tax rate of 30%. The value of the asset at 1 July 2027 may be determined either through a formal valuation or by applying a prescribed apportionment method; however, the basis for this apportionment has not yet been clarified, although Treasury has indicated that the ATO will provide a calculator to assist taxpayers who choose to adopt this method in lieu of obtaining a valuation. Business goodwill is affected by these changes and if you are planning to dispose of your business in the near future, we strongly recommend you get in touch with us.
Foreign Resident CGT Withholding: For contracts signed on or after 1 January 2025, foreign resident capital gains withholding applies at 15% of the property value on Australian real property sales unless the vendor provides a valid ATO clearance certificate for Australian residents or a variation notice.

Let Us Help You Plan

Small Business Capital Gains Tax Concessions are valuable CGT concessions that can apply to a range of business assets, including business goodwill, property and shares. If applicable, these concessions could result in a tax-free capital gain on a business asset disposal and also the ability to contribute more to super than would otherwise be available to you. These concessions can be applied where there is a sale of a business asset or a restructure to achieve a more suitable business ownership structure.

Where assets are owned by trusts, the distributions by the trust each year may be relevant to the eligibility to claim these concessions. Even more so now, given the proposed changes to the 50% CGT Discount from 1 July 2027, these concessions can significantly improve the after-tax proceeds from the disposal of qualifying assets. If you would like to find out if these concessions are currently available to you, or in the future, please get in touch with us for a review. We welcome your call to discuss tax planning for you individually as well as for your business.

Please refer to the links below for more information on the Federal Budget 2026-2027: