November 2025 Newsletter: ATO refreshes compliance focus for private groups for 2025-26

 

The ATO has published its refreshed 'Areas of Focus' for privately-owned and wealthy groups for the 2025-26 year, signalling heightened scrutiny across a range of governance, tax and structural issues.

Key focus areas include:

• Use of business funds or assets for personal or intra-group purposes, with particular reference to Division 7A arrangements and “lifestyle” assets.
• Succession planning and structuring activity: asset transfers, restructures and wealth-shifting aimed at tax outcomes.
• Core compliance-obligation risks: timely registration, lodgment, payment of tax, correct reporting of income/sales/capital gains.
• Industry and emerging-issue hot spots: property & construction, private equity, international dealings / cross-border, use of tax-exempt or concessional-tax entities, GST refund fraud.

Why this matters for advisers

The update underscores that the ATO is shifting from general oversight to targeted risk-based engagement with private groups, using analytics, intelligence and case-work to sharpen its focus.

Advisers should interpret this as a signal to revisit tax governance, documentation and structural arrangements for their private-group clients ahead of the year-end.

Practical adviser actions

• Review client structures for any Division?7A exposures or inappropriate use of business assets for personal or intra-group use.
• Where succession planning or restructuring is proposed or underway, ensure full tax-impact modelling (CGT, rollover eligibility, trust distribution implications) and document commercial rationale.
• Check that registration, lodgment and payment obligations are met across all group entities, including trusts, entities with concessional tax status, GST across group transactions.

For clients operating in higher-risk sectors (property/ construction, private equity, international operations), it is important for tax agents to assess whether systems/controls are sufficient and that transactions are clearly documented and arms-length.

Private groups: what's on our radar for 2025-26 | Australian Taxation Office