With 2025 well and truly underway, the Australian Taxation Office (ATO) has updated its 2024-2025 areas of focus.
Released on 31 January 2025, it outlines the key risk areas the ATO intends to focus on for private wealth in this financial year.
What key risk areas have been highlighted?
Key areas in the ATO’s spotlight include foundational issues:
- Registration, lodgment and payment
- Incorrect reporting
- Tax advisers and professional firms
- Division 7A
- Capital gains tax (CGT)
Property and construction:
- International transactions
- Other domestic transactions:
- non-arm’s length income in self-managed super funds
- misinterpretation or disregard for family trust elections
- residents not including distributions from foreign trusts (Section 99B)
- franking account balance discrepancies
- 45-day holding rule (franking credit integrity rules).
Emerging or evolving risks and issues
Incorrect reporting
- trusts over-claiming deductions that inappropriately reduce trust net income
- increasing lodgments in industry sectors where R&D activities and expenditure may not be eligible
- incorrectly claiming GST credits on employee allowances
- incorrectly claiming GST refunds without sufficient evidence to substantiate claims.
CGT
- Division 149 (pre-CGT asset)
- reduction in capital gains and losses arising from CGT events in relation to certain voting interests in active foreign companies (Subdivision 768-G).
Other emerging areas
- inappropriate use of private ancillary funds to hide wealth, offset CGT events, or extract other tax benefits by moving taxable income or assets through not-for-profit vehicles
- trust loss trafficking (inappropriate generation and use of losses)
- share buyback arrangements
- thin capitalisation rules
- cryptocurrency based business models
- $3 million cap on super.
Targeted focus areas
- Succession planning
- Private equity
- Retirement villages
- GST focus areas – From a GST perspective, we’re focusing on our two largest industries, retail and construction.
Self Managed Super funds (SMSF) continue to be an area of ATO focus and reviews which can result in significant penalties and trustee disqualification.
The following is a summary of ATO compliance activity capturing trustee disqualification and ATO assessments issued to SMSFs.
The ATO maintains a register of disqualified SMSF trustees on its website. The number of disqualifications has steadily increased:
| Year (calendar) | SMSF Trustee Disqualification | SMSF ATO assessments (Income year per ATO annual report) |
| 2022 | 548 | 118 |
| 2023 | 736 | 148 |
| 2024 (3 Qtrs) | 435 | 126 |
For more information on the ATO’s current areas of focus, please talk to Coleman Greig’s expert Taxation lawyers.
