Why the ATO is targeting baby boomer wealth?
- Adrian De Vito - CPA
- Feb 10
- 2 min read
ATO Targets Baby Boomer Wealth Transfers
The ATO is increasing scrutiny on wealth transfers and succession planning among high-net-worth baby boomers. According to ATO Private Wealth Deputy Commissioner Louise Clarke, "Succession planning, and the tax risks associated with it, is our number one focus in 2025."
If you are part of the ATO’s Top 500 or Next 5,000 private groups, expect heightened attention on how money flows through your entities. Key areas of concern include:
Division 7A loans being settled through distributions.
Asset transfers within family groups that may avoid CGT.
Restructuring of family interests and trust deeds.
Trust structures are under the microscope, particularly those with Family Trust Elections (FTEs) or Interposed Entity Elections (IEEs). Distributions outside the family group attract a 47% Family Trust Distribution Tax.
If you are restructuring assets or planning a business transition, ensure compliance to avoid ATO scrutiny.
Will Credit Card Surcharges Be Banned?
Following the UK and European bans, Australia is reviewing its surcharge rules. The Reserve Bank of Australia (RBA) launched a review into merchant payment costs and surcharges, with a push for increased transparency.
Key considerations:
Government action: A ban on debit card surcharges from January 2026, pending the RBA’s final decision.
Impact on businesses: If surcharges are banned, businesses will need to absorb costs or increase prices.
Small business disadvantage: Small merchants currently pay three times more in transaction fees than large businesses.
Current rules: Merchants can only charge the actual cost of accepting card payments, and excessive surcharges are already banned for major card networks.
If changes occur, businesses will need to adjust pricing strategies.
Superannuation Death Benefit Delays
Complaints about delayed superannuation death benefits have surged, prompting the government to introduce mandatory standards for large super funds.
What you need to know:
Your super does not automatically form part of your estate—it is distributed based on fund rules and your death nomination.
A binding nomination ensures your super goes directly to your chosen beneficiary.
If no valid nomination exists, trustees determine beneficiaries, which can cause significant delays.
Check your super nominations regularly to avoid complications.
Retirement Super Cap Increases to $2 Million
From 1 July 2025, the tax-free transfer balance cap increases from $1.9m to $2m, allowing retirees to shift an additional $100,000 into tax-free super income streams. If you are considering retirement, waiting until July 2025 could maximize your tax-free retirement savings.
Quote of the Month:
“To the man who only has a hammer, everything he encounters begins to look like a nail.” – Abraham Maslow
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