The Australian Taxation Office (ATO) recently signalled a significant shift in its focus for 2025, specifically targeting private wealth and succession planning. If you or your family group fall within its scope, you could be subject to increased scrutiny over how your wealth is structured, managed, and transferred. This intensified oversight means that any non-compliance or gaps in your tax planning could result in audits, financial penalties, or even legal consequences.
Now more than ever, ensuring your business and investment structures are robust and fully compliant is essential to mitigate risk and safeguard your wealth.
Navigating the complexities of private wealth and succession
The ATO’s focus on private wealth stems from a rise in business and private wealth restructures that appear to be linked to succession planning. Key triggers that may attract ATO attention include
- Division 7A loans: These loans, often made between companies and shareholders or their associates, can have significant tax implications for private wealth structures if not structured and managed correctly.
- Asset movements within family groups: Transferring assets between family members or entities within a family group can trigger capital gains tax or other tax liabilities if not handled carefully.
- Restructuring of family member interests: Changes to ownership structures or the way family members participate in the business can have complex tax and legal implications for wealth distribution and succession.
- Trusts and estate planning: Trusts are often used in succession planning to manage and distribute wealth, but they require careful consideration to ensure compliance with tax laws and achieve the desired outcomes.
Why your business structure matters: Ensuring compliance and safeguarding our wealth.
Choosing the right business structure is a fundamental decision that impacts tax obligations, asset protection, and succession planning. However, with the ATO increasing its scrutiny, the priority should be ensuring that your structure is not only suitable but also fully compliant with evolving tax laws.
It’s important to remember that your business structure isn’t a static entity; it needs to adapt as your circumstances change. Regular reviews are essential to ensure it remains aligned with your evolving goals, particularly as you approach retirement and consider succession.
Your business and wealth structures should be regularly reviewed to ensure they align with current regulations and do not expose you to unnecessary risks. Compliance is not just about avoiding penalties—it’s about maintaining financial security and ensuring the smooth transfer of wealth within your family.
With the ATO shining a spotlight on private wealth and succession planning, now is the time to assess your structure and address any compliance gaps before they become an issue.
If you need guidance on ensuring your business and wealth structures meet ATO requirements, contact your local William Buck advisor for expert advice.
