Your Knowledge Newsletter – November 2025

This month brings a mix of tax reform, real-world lessons, and practical planning insights. We unpack the Government’s latest announcements on the proposed overhaul of the super tax rules that will reshape strategies for those with balances above $3 million. A recent tribunal decision also serves as a reminder that it is difficult to access tax relief for medical expenses, even when tied to income from a disability pension. For small businesses, proposed legislation extends the $20,000 instant asset write-off and introduces new transparency measures for companies and charities. And finally, we look at the rising threat of cybercrime — and what every business can do to strengthen its defences.

Super Tax Shake-Up: Big Balances Beware

If your super balance is comfortably below $3 million, you can probably relax — the proposed changes to the super rules shouldn’t adversely affect you (yet). But if your super is nudging that level, or if you’re clearly over, the Treasurer’s latest announcement could change how you think about super’s generous tax breaks.

For some time now the Government has been planning to introduce targeted measures to reduce tax concessions for those with superannuation balances over $3 million. This has commonly been referred to as the Division 296 tax.
However, the Government has reworked the proposed new tax — part of the Better Targeted Superannuation Concessions (BTSC) policy — attempting to make it simpler, fairer, and more practical. After a wave of industry criticism, the revised version keeps the broad policy intent but removes some of the more problematic features.

What’s Changing — and Why It’s Simpler

The original 2023 proposal aimed to apply an extra 15% tax on “earnings” from super balances above $3 million. The big flaw? “Earnings” included unrealised gains — paper profits on assets like property or shares that hadn’t been sold.
The reworked model drops unrealised gains from the equation entirely, taxing only realised earnings — actual income and capital gains when assets are sold.

A Fairer, Tiered Approach

• Tier 1 ($3m–$10m): Extra 15% tax on earnings from this portion (making a total rate of 30%).
• Tier 2 (over $10m): Extra 25% tax on earnings above $10m (for a total rate of 40%).

Both thresholds will be indexed annually to inflation. The start date has been pushed back to 1 July 2026, with the first assessments expected in 2027–28.

What This Means in Practice

Consider Megan with $4.5 million in super and $300,000 in realised earnings. She will pay $15,000 in additional Division 296 tax. Emma with $12.9 million in super and $840,000 in earnings will pay around $115,000 in extra tax.

Low Income Superannuation Tax Offset

The Government will increase the Low Income Superannuation Tax Offset (LISTO) from $37,000 to $45,000 from 1 July 2027. The maximum payment will increase to $810.

When Medical Bills Meet Tax Rules – Lessons from a Heartbreaking Case

In Wannberg v Commissioner of Taxation [2025] ARTA 1561, the Administrative Review Tribunal upheld the ATO’s decision to deny nearly $100,000 in medical deductions to a taxpayer receiving a TPD pension.
The tribunal found no “nexus” between the medical treatments and the pension income. The costs were considered private in nature.

What This Means for You

• Understand the “nexus” test.
• Recognise the private line.
• Treatment vs assessment.
• Plan for non-deductible costs.
• Seek advice early.

Proposed Extension of the Instant Asset Write-Off and Other Tax Measures

The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 proposes extending the $20,000 instant asset write-off to 30 June 2026.
Small businesses with turnover under $10 million can deduct the full cost of assets under $20,000, per asset.

The Bill also proposes:

• Strengthened corporate disclosure of equity derivative interests.
• Greater transparency for charities.
• Simplified financial regulator reviews.

Cyber In Accounting: Safeguarding Financial Data in a Digital Age

The financial services sector was the most targeted industry in Australia in FY 2024/25, with cybercrime costs increasing by up to 55% for SMEs.

People: The Biggest Cyber Risk
More than 85% of all cybersecurity incidents are caused by human error.

Technology and Updates
All critical patches should be applied within 48 hours. Windows 10 is now End of Life and no longer receives security updates.

Visibility and Monitoring
The average breach takes 288 days to detect. Logging and alerts are critical.

The Importance of a Cyber Incident Response Plan
A CIRP defines the steps to act, mitigate, and respond to cyber events.

Protecting Your Business, Clients, and Reputation
Cybersecurity is now a core business strategy covering staff training, technology, data handling policies, and incident response plans.