EOFY 2026: Why This Year’s Tax Plan Carries More Weight Than Most

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10 May

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The end of the financial year has a way of sneaking up. One minute you’re back from the Easter long weekend, the next minute you’re staring down 30 June with three weeks to make decisions that should have been made in March.

Tax planning isn’t about chasing aggressive positions or bending the rules. It’s about knowing your number – your likely tax position – early enough to do something about it. With the right lead time, decisions that feel reactive in late June become deliberate in May.

This year, that lead time matters more than usual. The 2026 income year is bookended by significant reform: Payday Super, Division 296 and a sharper ATO compliance posture all commence from 1 July 2026. What you do – or don’t do – before 30 June this year will shape how cleanly your business and personal position transition into a very different landscape.

Why bother planning at all?

A useful tax plan delivers four things:

Clarity on cashflow. Knowing your likely tax bill in May beats discovering it in October, when the BAS, instalments and personal liabilities all land at once.
Legitimate opportunities you’d otherwise miss. Deductions, concessions, timing decisions and structuring options often disappear at midnight on 30 June. Many can’t be retrofitted.
Better commercial decisions. Tax should sit alongside the commercial logic of a decision – not drive it, but inform it.
A lower-risk position. Issues identified in May can be resolved. Issues identified during the tax return process often can’t.

The rule of thumb is simple:

Tax planning done in May is strategy. Tax planning done in late June is triage.

Key considerations for 2026

1. Forecast where you’ll land

Before any planning conversation is useful, you need a credible estimate of your year-to-date result and your likely full-year position. For trading entities, that means up-to-date management accounts. For investors and trust beneficiaries, it means a clear picture of distributions, capital events and other income streams.

Without the forecast, every other lever in this list is being pulled in the dark.

2. Bring forward genuine deductible expenses

Where it makes commercial sense, accelerating deductible expenditure into the current year can reduce taxable income. Common candidates include:

repairs and maintenance that were already on the to-do list,
professional subscriptions and memberships,
staff training and development,
insurance premiums,
marketing campaigns,
prepayments (subject to the 12-month rule for SBE taxpayers).

A word of caution: bringing forward expenses only delivers a lasting benefit if your tax rate this year is higher than your expected rate next year. Otherwise, you’re shifting timing, not creating value.

3. Review capital expenditure and the instant asset write-off

The $20,000 instant asset write-off for small business entities continues to apply, with assets needing to be first used or installed ready for use by 30 June 2026 to qualify in the current year.

If a capital purchase is genuinely on the horizon – equipment, vehicles, technology, fit-out – the timing of when it is installed and ready for use can matter as much as when it’s ordered. A van sitting in transit on 30 June is not “ready for use”.

4. Write off bad debts and obsolete stock

Two perennial items that get left until it’s too late:

Bad debts. To be deductible in the current year, debts must be formally written off in the entity’s records before 30 June and supported by appropriate documentation.
Obsolete or damaged stock. Stock on hand should be reviewed and valued at the lower of cost, market selling value or replacement value. Genuine write-downs are deductible – but only if the review is done.

5. Get superannuation contributions in early – very early this year

Superannuation timing is always tight, but 2026 brings additional pressure.

For a contribution to be deductible in 2025-26, it must be received by the super fund before 30 June – not merely sent. Clearing house delays during the final week of June are well-documented, and the ATO’s free Small Business Super Clearing House (SBSCH) is expected to be phased out in the lead-up to Payday Super.

Beyond timing, consider:

contribution caps and the availability of carry-forward concessional cap amounts (for those with a total super balance under $500,000),
personal deductible contributions and whether a Notice of Intent has been validly lodged and acknowledged,
spouse contributions, downsizer contributions and government co-contributions where eligible.

For high-balance members, this is also the year to model the impact of Division 296 (see point 9).

6. Trust distributions: resolve before 30 June, not after

Trustees of discretionary trusts must make valid distribution resolutions by 30 June — or earlier if the trust deed requires it. The word “resolve” is doing a lot of work here, but the point is a serious one: get this wrong and the trustee can be assessed at the top marginal rate on the trust’s income.

In 2026, trustees should also be alive to:

ATO scrutiny of section 100A reimbursement arrangements, particularly distributions to adult children,
the interaction of distributions with the trust deed (some deeds restrict beneficiaries or require specific resolutions),
streaming of capital gains and franked distributions, which generally requires explicit treatment in the resolution,
present entitlements left unpaid to corporate beneficiaries (UPEs) and Division 7A consequences.

A late-night resolution drafted from a phone on 30 June is rarely the resolution you want to defend later.

7. Division 7A: review loan balances before they become a problem

Private company shareholders and associates with loans, payments or debts forgiven during the year should review:

minimum yearly repayments on existing complying loans,
new amounts advanced during the year and whether they need to be placed on a complying loan agreement before lodgement day,
the treatment of unpaid present entitlements owed to corporate beneficiaries,
benchmark interest rate movements.

Division 7A is one of the most common – and most expensive – areas to discover an issue after 30 June.

8. Capital gains and losses: timing is the lever

For investors, business owners contemplating a sale and SMSF trustees, the timing of disposals can shift a significant tax outcome. Worth reviewing:

whether a planned disposal can be deferred or accelerated to a more favourable year,
realisation of unrealised losses to offset crystallised gains,
availability of carried-forward capital losses,
eligibility for the 50% CGT discount (12-month holding period) and the small business CGT concessions where relevant.

9. Review your position ahead of Division 296

From 1 July 2026, the Government has proposed an additional tax on superannuation earnings attributable to a member's total super balance above $3 million, with a further tier flagged for balances above $10 million. The proposal – including indexation of the thresholds and a realised-earnings basis – is yet to be legislated, but members likely to be affected should begin reviewing their position now.

For members likely to be affected, the year leading up to commencement is the right time:

ensure asset valuations and fund records are current (particularly for SMSFs holding property or unlisted assets),
model contribution and pension strategies under the new regime,
review estate planning and beneficiary nominations,
think carefully before withdrawing or restructuring assets – knee-jerk reactions are rarely the right answer.

10. Get Payday Super-ready before the bell rings

From 1 July 2026, super guarantee is expected to be payable within seven days of each payday. The 30 June 2026 payroll cycle is effectively the dress rehearsal.

Before then:

confirm your payroll software is Payday Super-capable,
arrange a clearing house alternative to the SBSCH,
review employee onboarding to ensure stapled fund and TFN details are captured upfront,
forecast cashflow without the quarterly super buffer you’ve grown used to.

11. PAYG instalments: vary if the number is wrong

PAYG instalments are calculated on prior-year data and often bear little resemblance to current-year reality. If your trading position has shifted materially – up or down – varying your instalment can avoid either an unwelcome refund position or a large balance owing.

Variations should be supported by reasonable estimates. The ATO can apply general interest charge if a variation is significantly understated.

12. Working-from-home and motor vehicle claims

Two areas of perennial ATO focus, and both rely on records made during the year, not reconstructed in October:

Working from home. The fixed rate method (currently 70 cents per hour) requires a record of actual hours worked from home for the full year – not a four-week sample.
Motor vehicles. The logbook method requires a valid 12-week logbook (refreshed every five years, or when circumstances change materially). The cents-per-kilometre method is capped at 5,000 business kilometres per car.

If the records aren’t there by 30 June, the deduction usually isn’t either.

Where the ATO is paying closer attention

The ATO has been increasingly transparent about its compliance focus areas. For 2026, particular care should be taken around:

section 100A and trust distributions to adult beneficiaries,
Division 7A loan agreements and UPEs,
contractor versus employee classification (especially relevant ahead of Payday Super),
GST and payroll tax on contractor arrangements,
working-from-home and motor vehicle deductions,
crypto asset disposals,
record-keeping and substantiation across the board.

None of these are new. What is new is the data-matching capability sitting behind them. Single Touch Payroll, super fund reporting, share registry data, property settlement data and crypto exchange reporting now flow into the ATO routinely – and discrepancies surface faster than they used to.

A few common pitfalls to avoid

A short list of mistakes we see most often in late June:

making a tax-driven decision that doesn’t make commercial sense (“I’ll buy a ute I don’t need to get the deduction”),
relying on super contributions that haven’t actually been received by the fund,
drafting trust distribution resolutions without checking the trust deed,
treating the instant asset write-off as a cash refund rather than a deduction,
forgetting that a deduction this year often means a smaller deduction next year.

Tax planning works best when the tax tail isn’t wagging the commercial dog.

What this means for you

Whether you operate a trading business, run a family group, hold an investment portfolio or sit somewhere across all three, the lesson is the same:

The earlier the conversation, the more options you have.

Many of the levers in this article are timing levers. By late June, most of them have already moved out of reach.

Final thoughts

The 2026 EOFY is more than the close of another income year. It is the runway into a materially different compliance environment – Payday Super, Division 296, sharper ATO data-matching and a tighter posture on penalties.

Use the next two months well, and your business and personal position will land into 2026–27 cleanly, with fewer surprises and more options. Leave it until late June and you’ll be making decisions in days that should have been made in weeks.

If you’d like to sit down with us to model your position, identify opportunities and build a tailored plan ahead of 30 June, our team is here to help.

If you have questions, please contact Resolve on 02 6147 6741 or via hello@resolve-advisory.com.au.

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