Succession planning to remain major focus for ATO this year

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The ATO has warned privately owned and wealthy groups that succession planning will remain a major focus in 2026 and advised groups to carefully review their arrangements.

ATO deputy commissioner Louise Clarke said among its engagements with private groups, the ATO is still seeing situations where planning has been undertaken without a full appreciation of the tax consequences. In some cases, decisions made many years ago have given rise to unforeseen consequences and sometimes significant tax consequences, Clarke said.

Clarke said the ATO was also noticing errors around fundamentals such as eligibility for concessions and rollovers, sometimes caused by, or exacerbated by, poor governance or record keeping.

Another key theme among engagements with private groups is arrangements that appear to have been put in place to access concessions and rollovers, she said.

The Tax Office previously announced plans to publish a practical compliance guideline on back-to-back rollovers.

"It will explain when we're more likely to apply compliance resources to consider the application of Part IVA of the Income Tax Assessment Act 1936 to an arrangement that comprises multiple CGT rollovers," Clarke said.

"Looking ahead, succession planning will remain a key focus area for us, and our message to privately owned and wealthy groups is consistent: start early, review plans regularly as circumstances change, and fully consider tax implications – not just at the point of transition but over the life of the arrangement and for the next generation."

Clarke said family trust elections were another important area for private groups and their advisors to review.

"The clock is ticking – if your private group has family trust elections, now is the time to self-review, pay and put in your request for remission of general interest charge," she said.

"Up until 31 December 2026, we'll look favourably on GIC remission requests in these circumstances and may remit up to 80 per cent."

She also reminded private groups about the 45-day holding rule for franking credits.

"Even if a trust is making a distribution referable to a distribution with franking credits attached to a beneficiary who has made an FTE, the beneficiary may not be eligible for franking tax offsets they receive from it," she said.

"You need to check if the holding period rule applies."

Clarke also advised private groups that incorrect labels on the form to make, vary or revoke an election will not automatically render the form invalid.

"We have heard that some people may be concerned about this, but as is the case with all approved forms, we take a sensible and practical approach," she said.

"However, changing your mind down the track on who you think should have been the specified individual (when you're no longer eligible to vary your FTE), does not fall into that scenario."

02 March 2026
Miranda Brownlee
accountantsdaily.com.au