November 2025 Knowledge Update

Super Tax Reforms, Real-World Tax Lessons & Cybersecurity Essentials

This month brings a mix of tax reform, practical insights, and real-world lessons for individuals and businesses alike.

The Government has unveiled further changes to the proposed super tax rules, designed to target very large balances. A new tribunal case offers a sobering reminder that not all medical expenses qualify for tax deductions — even when linked to disability pensions. Meanwhile, proposed legislation extends the $20,000 instant asset write-off, and we look at how to protect your business from rising cybercrime risks.

Super Tax Shake-Up: Big Balances Beware

If your super balance sits below $3 million, you’re unlikely to be affected — for now. But if you’re edging close or already above that mark, the Treasurer’s latest revisions could reshape your long-term strategy.

The Government’s Better Targeted Superannuation Concessions (BTSC) — also known as the Division 296 tax — aims to reduce tax concessions for very large super balances. After strong feedback from the industry, the revised model is now simpler, fairer, and more practical.

What’s Changing

• Taxing real gains only: The original plan included unrealised gains (on assets not yet sold). The updated model taxes only realised earnings — that is, actual income and capital gains.

• Two-tier system:

  • Tier 1: Balances between $3m and $10m will attract an extra 15% tax on earnings (total rate 30%).

  • Tier 2: Balances above $10m will attract an extra 25% tax (total rate 40%).

• Indexed thresholds: Both limits will rise with inflation — helping to avoid bracket creep.

• Deferred start date: Implementation is now set for 1 July 2026, with first assessments due in 2027–28.

These adjustments address major industry concerns by eliminating tax on unrealised gains and simplifying compliance for funds — especially SMSFs.

Low Income Superannuation Tax Offset (LISTO) Boost

From 1 July 2027, the LISTO income threshold will rise from $37,000 to $45,000, and the maximum payment will increase to $810. This change will benefit lower-income earners and part-time workers.

What You Can Do Now

• Review your total super balance (TSB) and project growth to 2026.

• Consider strategies around liquidity and asset sales timing.

• Stay alert for draft legislation in 2026 — we’ll continue to keep you informed.

When Medical Bills Meet Tax Rules – Lessons from a Heart breaking Case

A recent Administrative Review Tribunal case has highlighted how strictly the ATO applies tax deduction rules — even in difficult circumstances.

In Wannberg v Commissioner of Taxation [2025] ARTA 1561, the taxpayer, who received a Total and Permanent Disability (TPD) pension, sought deductions for nearly $100,000 in medical expenses. Despite the connection between his health and his pension, the tribunal ruled that the expenses were private in nature, not incurred in earning assessable income.

Key Takeaways

• Medical expenses rarely deductible: Even if linked to your ability to work, they usually don’t meet the “nexus” test for earning income.

• Private vs professional distinction: Costs to maintain health are private; costs to maintain a licence or qualification may be deductible.

• Plan for non-deductible costs: Factor medical expenses into your broader financial plan.

If you’re unsure whether an expense is deductible, get advice early — don’t assume eligibility.

Instant Asset Write-Off Extended – Small Business Boost

Good news for small businesses: the Government has proposed to extend the $20,000 instant asset write-off to 30 June 2026.

Eligible businesses with turnover under $10 million will continue to be able to immediately deduct the full cost of assets under $20,000, provided each item is first used or installed by the new deadline.

This extension gives small businesses more breathing room to plan equipment and technology upgrades that deliver real cash flow benefits.

Other Proposed Measures

• Corporate transparency: Listed companies will face stronger disclosure requirements for equity derivatives and control interests.

• Charity sector transparency: The ACNC will gain powers to disclose investigation details where it serves public interest — strengthening trust in the sector.

• Regulator reviews simplified: Oversight of ASIC and APRA will move from a two-year to a five-year review cycle.

What to Do

• Plan and budget for 2025–26 asset purchases now.

• Ensure governance and reporting systems are ready for new transparency requirements.

Cyber in Accounting: Safeguarding Financial Data in a Digital Age

Cybercrime remains one of the fastest-growing threats to Australian businesses. The financial services sector — including accounting and advisory firms — continues to be a top target.

People: The Biggest Risk

Over 85% of cyber incidents stem from human error. Regular staff training is crucial — focus on spotting phishing attempts, managing passwords safely, and understanding what risky links look like.

Technology & Updates

Keep systems current. Legacy software and outdated hardware open the door to attackers. The Australian Signals Directorate recommends applying critical patches within 48 hours. With Windows 10 now at end-of-life, devices using it will no longer receive security updates — making upgrades essential.

Visibility & Monitoring

You can’t defend what you can’t see. Establish real-time logging and alerts to detect unauthorised access. The average breach in the financial sector takes 288 days to detect — that’s 288 days of potential exposure.

Have a Cyber Incident Response Plan (CIRP)

A tested CIRP defines how your business responds to an incident — including communication, investigation, and recovery steps. Testing it regularly ensures a quick and effective response when every minute counts.

Protecting Your Business and Clients

Treat cybersecurity as a business strategy, not just an IT issue. Protecting your clients, data, and reputation is essential to maintaining trust — and resilience.

Note: The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone. 

If expert assistance is required, Contact the team @ Clear Accounting Solutions to run you through your options