In our October Newsletter 2025, we identify the red flags of superannuation scams and navigate the complex rules for claiming electric vehicle (EV) car expenses. We also break down the powerful small business CGT retirement exemption, explain the often-overlooked disadvantages of family trusts, and clarify the tax on redundancy payments.
????️ How to Protect Your Super from Scammers
With over $4 trillion in Australian superannuation, it’s no surprise scammers see it as a goldmine. ASIC has warned of a rise in pushy sales tactics aimed at luring people into risky super switches. Since your super is one of your most significant investments, knowing the red flags is crucial to keeping it safe.
In this article, we cover:
- The warning signs of a scam include high-pressure tactics, cold calls, and “free” super health checks.
- How scammers can sound polite and knowledgeable to seem legitimate.
- Simple steps to protect yourself, like hanging up on pressure calls and doing your own research.
Helpful Tools & References (from the newsletter):
- ASIC: Always check that anyone giving you financial advice is licensed with ASIC.
- Moneysmart: Use trusted resources, such as ASIC’s Moneysmart website, to learn about your options.
- ATO: You can safely track down lost super yourself via the ATO, rather than using a third-party service.
ATO Reference: For more information on current threats and how to protect your personal information, visit the ATO’s “Verify or report a scam” page.
https://www.ato.gov.au/online-services/scams-cyber-safety-and-identity-protection/verify-or-report-a-scam
???????????????? Family Trusts:
Balancing the Pros and the Cons
Family trusts are widely used for their tax advantages, particularly the ability to split income among family members to achieve a lower effective tax rate. They are also a powerful tool for asset protection and business succession planning.
However, for all their benefits, trusts come with significant complexities and demands.
In this article, we explore:
- The complex rules governing the “stream” of capital gains or franked dividends to specific beneficiaries.
- Why capital losses cannot be distributed and must instead be carried forward within the trust.
- The high penalty tax rates usually apply to distributions made to children.
- The 80-year lifespan of most trusts and the potential for a large Capital Gains Tax (CGT) liability upon winding up.
Helpful Tools & References (from the newsletter):
- Trust Deed: Your trust deed must specifically allow for the streaming of gains, so you may need to update it.
- High Court: A current High Court case is examining “unpaid present entitlements” (UPEs) to companies and the potential application of Div 7A.
Reference: To understand the tax implications, including the Family Trust Election (FTE) and how distributions are taxed, see Firstlink’s information on “Family trusts”.
https://www.firstlinks.com.au/family-trusts-are-they-still-worth-it
????️ CGT Retirement Exemption:
A $500k Boost (No Retirement Needed!)
Suppose you’re a small business owner selling your business or an asset. In that case, the Capital Gains Tax (CGT) “retirement exemption” can be an invaluable tool to reduce or even eliminate the tax on your gain.
The best part? You don’t actually have to retire to use it.
In this article, we explain:
- How the exemption works based on your age. If you’re under 55, the exempt gain must be paid into your super. If you’re 55 or over, you can take it tax-free.
- The $500,000 lifetime limit applies to this concession.
- The special payment rules that must be met if a company or trust makes a gain.
Helpful Tools & References (from the newsletter):
- The Four CGT Concessions: This exemption is one of four available to small businesses.
- The 15-Year Exemption: If you meet the conditions for the 15-year exemption, it must be used first. This concession is even more potent as it exempts the entire capital gain.
Reference: For detailed eligibility rules and conditions, visit the MLC’s page on the “Small business retirement exemption”.
https://www.mlc.com.au/content/dam/mlcsecure/adviser/technical/pdf/guide_to_sbcgt.pdf
???? Helping Your Kids Buy Their First Home ….
with the FHSSS
The First Home Super Saver Scheme (FHSSS) is a tax-effective way for your children to save for their first home deposit inside their superannuation fund. It allows them to grow a deposit more quickly by leveraging the tax benefits of super.
In this article, we detail:
- The scheme allows individuals to make voluntary contributions of up to $15,000 per year, with a total cap of $50,000 across all years.
- The tax advantages: earnings are taxed at just 15% inside super, and withdrawals are taxed at your marginal rate, less a 30% offset.
- How parents can help (by gifting money) and the crucial rule that your child must make the contribution from their own bank account.
Helpful Tools & References (from the newsletter):
- myGov: When your child is ready to buy, they must first apply to the ATO through their myGov account to get a “determination” of the maximum amount they can withdraw.
- Government Co-contribution: If your child is a low-income earner, they may also be eligible for a government co-contribution, though this amount cannot be withdrawn under the FHSSS.
ATO Reference: For full eligibility criteria and the process for contributing and withdrawing, see the ATO’s official “First Home Super Saver Scheme” guide.
https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme
???? Understanding the Tax
on Redundancy Payments (ETPs)
Certain redundancy payments are tax-free up to a limit depending on your years of service with that employer.
Receiving a redundancy payout can provide financial breathing room, but it’s vital to understand how that money is taxed. Not all parts of a redundancy payment are taxed in the same way, which can make a big difference to your final take-home amount.
In this article, we explain:
- The definition of a “genuine redundancy” (i.e., your role no longer exists) is required to access tax-free benefits.
- The tax-free threshold for 2025-26 is $13,100 plus $6,552 for each full year of service.
- How amounts above the tax-free limit are taxed as an Employment Termination Payment (ETP).
- How unused leave is taxed differently from the redundancy amount.
Helpful Tools & References (from the newsletter):
- Catch-up Super Contributions: You may be able to reduce your tax bill by contributing part of your payout to super, using unused concessional cap space from the past five financial years.
ATO Reference: To understand what qualifies and how different components are taxed, visit the ATO’s page on “Tax on termination payments”, which covers genuine redundancy and ETPs.
https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/leaving-your-job/genuine-redundancy-payments
⚡ Claiming Car Expenses for Your Electric Vehicle (EV)
Related FBT exemptions eligibility
Claiming a tax deduction for the business use of an Electric Vehicle (EV) is more complex than for a traditional petrol car, especially when using the logbook method. You need to keep specific records and make choices about your calculation method.
In this article, we outline the two methods:
- Cents Per Kilometre Method:
- This is the simplest method, allowing a claim of 88 cents per kilometre (for 2025-26) for up to 5,000 business km.
- It covers all running costs (including electricity, depreciation, and insurance), and you don’t need receipts for those costs.
- Logbook Method:
- This method requires a 12-week logbook to determine your business-use percentage.
- You can then claim that percentage of all your actual car running costs, including electricity, depreciation, insurance, and repairs.
Helpful Tools & References (from the newsletter):
- ATO EV Home Charging Rate: For EV charging at home, the newsletter notes a rate of 4.2 cents per kilometre can be used to calculate your electricity costs when using the logbook method.
- Logbook: A logbook must be kept for a continuous 12-week period and is generally valid for five years.
ATO Reference: For the rules on both methods and the records you need to keep, see the ATO’s guide on “EV Exemptions and car expenses”.
☂️ Need Advice Tailored to You?
This newsletter provides general information, but we know your personal and business situation is unique.
The articles in this issue—from protecting your super to navigating family trusts, CGT concessions, or redundancy payments—can be complex.
If any of these topics have raised questions, or if you have any other tax or financial matter on your mind, please reach out. We’re here to help you with any specific advice you need.
Contact Garry and the team today:
- Call: 07 3040 0304
- Email: admin@umbrellaaccountants.com.auBook online