Tax Bites: Australian Tax Podcast Series

Tax Bites EP22: 2026 Federal Budget - CGT Discount Replaced, Negative Gearing Curtailed, and Discretionary Trusts Hit with Minimum Tax

Late on Budget night Toby Eggleston, Ryan Leslie and Nick Heggart discuss Treasurer Chalmers’ budget, focused on reshaping personal tax, especially capital gains and discretionary trusts, under “intergenerational equity.”

Corporate measures are smaller, including re-announced non-resident CGT changes with intended retrospectivity to 2006 and limited transitional relief for renewables to 30 June 2030, expanded VCLP/ESVCLP investment caps, and R&D offset tweaks forecast to reduce tax by $1.5b. Small business changes include making the instant asset write-off permanent, a refundable loss offset for startups from 1 July 2028, and a permanent loss carry-back for companies under $1b turnover.

Major personal reforms include phasing out the 50% CGT discount from 1 July 2027 (replaced by cost-base indexation and a 30% minimum CGT tax), taxing pre-CGT assets, limiting negative gearing for post-budget residential purchases (except new builds), and imposing a 30% minimum tax on discretionary trusts from 1 July 2028 with complex impacts, especially for “bucket companies,” plus proposed restructuring rollovers amid stamp duty issues.

00:10 Budget Night Kick-off
00:41 Corporate Tax Overview
01:53 Non-Resident CGT Reboot
03:14 Venture Capital and R&D
05:16 Small Business Reliefs
06:20 Loss Carry-back Returns
08:44 Big Shift to Personal Tax
08:47 CGT Discount Ends
10:52 Tech and Startup Fallout
15:01 Negative Gearing Overhaul
16:51 Discretionary Trusts Seismic
21:37 Late Night Wrap Up

Tax Bites EP21: Exposure Draft Shock: Expanded Non Resident CGT on Land-Connected Assets and Treaty Override

Partners Toby Eggleston, Nick Heggart and Ryan Leslie discuss Treasury’s 10 April 2026 exposure draft legislation implementing and expanding the 2024 budget proposals on when non-residents pay Australian CGT. The draft materially broadens “taxable Australian real property” beyond general law real property (post the YTL and Newmont decisions) to include rights over land, contractual rights, and fixed or installed assets expected to be on land for most of their useful life (e.g., wind/solar assets, pipelines, mining equipment, tenant fixtures), plus water entitlements, with some elements proposed to apply retrospectively to 12 December 2006. It also includes a treaty-override via the International Tax Agreements Act, changes the principal asset test to a 365-day lookback, introduces a limited 50% CGT discount for certain renewable generation disposals to 1 July 2030, and tightens the non-resident CGT withholding/declaration and clearance certificate processes, all amid a 14-day consultation period.

Want to go deeper? Read our briefing note here

00:10 Welcome and agenda
00:32 Budget shock announcement
02:34 Overview of reforms
02:57 Expanded real property definition
06:25 Assets newly in scope
09:07 Uncertainty and edge cases
11:25 Retrospective start dates
14:39 Treaty override explained
23:26 Indirect interest test changes
27:54 Renewables CGT discount
31:14 Withholding and notifications
34:18 Consultation and wrap up

Tax Bites EP20: Taxation of Earnouts and Contingent Consideration in M&A: TOFA, Look-Through Earnout Rules and Key Traps

Toby Eggleston and Naison Seery discuss Australian tax treatment of earnouts and contingent consideration in M&A, noting increased use to bridge valuation gaps and that outcomes depend on TOFA, deal terms, metrics and payment timing, with ATO views still being tested. They outline the ATO’s shifting historical positions on whether earnout rights are separate CGT assets, buyer cost base treatment, and potential CGT event D1 exposure. TOFA is a key starting point for large taxpayers and can apply to contingent rights as financial arrangements, with timing and character mismatch implications; a business sale exception may exclude earnouts contingent on economic performance (not solely turnover/receipts), with uncertainty illustrated by the Merchant case. Outside TOFA, CGT applies and the look-through earnout rules may allow proceeds/cost base to reflect actual payments if strict conditions are met, including active asset and a hard five-year payment window.

00:09 Welcome
00:25 Why Earnouts Matter
01:26 ATO Views Over Time
05:44 TOFA as the starting point
07:27 TOFA Mechanics and Timing
09:27 Business Sale Exception Tests
10:53 Structuring Contingencies
13:26 In or Out of TOFA
17:37 Outside TOFA and Look Through Earn out rights
18:46 Look Through Requirements
20:12 Five Year Rule Pitfalls
23:39 Wrap Up and Key Takeaways

Tax Bites EP19: ATO focus on s128F, CGT rollovers, thin cap review and FIRB tax conditions

Toby Eggleston, Ryan Leslie and Jay Prasad discuss recent Australian tax developments: the ATO’s targeted consultation and planned updated guidance on the s128F public offer interest withholding tax exemption; anticipated ATO guidance (now indicated for early 2026) on back-to-back CGT rollovers and potential Part IVA risk; the Treasurer’s request for a Board of Tax review of thin capitalisation reforms; and evolving FIRB tax conditions.

00:10 Welcome to Tax Bites & today’s agenda
00:32 ATO consultation: Section 128F public offer IWT exemption (what’s changing)
02:06 128F in practice: private credit complexity & evidence you’ll need
03:53 Key takeaway: get 128F advice early before lender discussions
04:30 Back-to-back CGT rollovers: why the ATO is preparing guidance
05:04 Top-hat restructures, Bailador example & Part IVA risk focus
07:38 AusNet fallout, policy debate & Board of Tax review on rollovers
09:41 Board of Tax review: Thin cap reforms - scope, pain points, what may change
13:42 FIRB tax conditions: new tailored approach & the ATO tax questionnaire
16:30 Wrap-up: what we’re watching for in tax in 2026

Tax Bites EP18: Dissecting the Full Federal Court's Decision in Commissioner of Taxation and Hicks

In this episode of the Herbert Smith Freehills Kramer Tax Podcast, Tax Bites, partner Toby Eggleston, Associate Dan Beratis, and Ryan Leslie delve into the Full Federal Court's decision in the Commissioner of Taxation v Hicks case.

They discuss the background, facts, and history of the case, which involved a fashion retail business named City Beach, its restructure, and the tax implications under Section 45B and Part IVA of the 1936 Act. The episode covers the court's reasoning, the taxpayer's and commissioner's arguments, and key takeaways from the case, including the interpretation of Section 45B, the role of purpose in tax legislation, and the application of anti-avoidance rules. Additionally, insights from the recent PepsiCo decision and the potential impacts on future tax cases are explored.

00:10 Introduction and welcome 
00:29 Case background and facts 
02:53 Restructure details 
04:40 Commissioner's response 
06:35 Full Federal Court's reasoning 
07:51 Section 45B analysis 
17:41 Part IVA analysis 
24:10 Conclusion and final thoughts

Tax Bites EP17: High Court Validates Foreign Surcharge Land Taxes: Implications and Analysis

In this episode of the Herbert Smith Freehills Kramer Tax Bites podcast, Isaac Morgan, Mark Peters and Toby Eggleston discuss the recent Australian High Court decision in G Global against the Commissioner of State Revenue.

The conversation delves into the background, statutory setup, and arguments presented in the case, exploring the implications for foreign investors and potential future legal challenges. The episode also examines retrospective tax amendments and their broader impacts on taxation law.

00:10 Introduction 
01:06 Background Facts and Statutory Setup 
04:19 High Court's Consideration of the Arguments 
08:56 Implications of the Decision 
19:48 Options for Foreign Investors 
22:07 Closing Thoughts and Conclusion

Read more on our HSF Kramer tax note

Tax Bites EP16: Thin capitalisation update: The Third Party Debt Test and Recent ATO Draft Guidance PCG 2025/D2

In this episode of the Herbert Smith Freehills Kramer 'Tax Bites' podcast, host Toby Eggleston alongside Professor Graham Cooper and fellow partner Ryan Leslie, explore the complexities of the third party debt test as it relates to Australia's thin capitalisation rules. 

Key discussions include the overview and operational intricacies of the third party debt test introduced to replace the arm's length debt test, the guidance and issues arising from the ATO, and the impact of these changes on the infrastructure and property sectors. Special segments also cover the ATO's draft practical compliance guidelines on related party financing and the tax risk associated with the quantum of debt. In addition, the episode highlights updates on Section 899, U.S. tax policy interactions, and a farewell to fan favourite, Graeme Cooper after his substantial contributions to the firm.

00:10 Introduction and Welcome
00:54 Overview of Thin Capitalisation Rules
02:56 Third Party Debt Test Explained
06:11 Emerging Issues with Third Party Debt Test
12:34 Practical Challenges and Industry Reactions
20:14 Conduit Financing and Swap Costs
28:04 Draft Practical Compliance Guide (PCG) PCG 2025/D2
44:01 Closing Remarks and Farewell

Tax Bites EP15: Understanding Section 899: US retaliatory tax measures and the impact on Australian taxpayers

In this episode of the Herbert Smith Freehills Kramer Tax Bites podcast, hosts Toby Eggleston and Professor Graham Cooper discuss the significant implications of the proposed Section 899 under President Trump's 'One Big, Beautiful Bill' Act. They delve into how these retaliatory taxes imposed by the US aim to counteract what are perceived to be unfair or discriminatory foreign taxes, particularly affecting Australian companies. The discussion covers the legislative background, specific unfair taxes such as undertaxed profits rules, digital services taxes, and diverted profits taxes. They also explore the potential consequences for Australian taxpayers, the Australian government's actions, and the broader impact on the international tax regime. 

00:10 Introduction and Greetings
00:31 Overview of Section 899 and Its Implications
00:56 Background and Legislative Process
01:52 Impact on Australian Firms and Government
05:26 Unfair Foreign Taxes Defined
10:29 Potential Triggers and Affected Taxes
11:53 Impact on Australian Taxpayers and Government
16:52 Modifications to BEAT Rules
20:50 Treaty Interactions and Future Implications
23:23 Conclusion and Final Thoughts

Tax Bites EP14: Election Season Tax Policy Updates and Impact on Businesses

In this episode of the Herbert Smith Freehills Tax Podcast, partner Toby Eggleston and consulting Professor Graham Cooper discuss recent tax policy announcements from both major political parties in light of the upcoming election. They focus on measures affecting large businesses, small businesses, and individuals and on unenacted measures and the implications of these policies for businesses and taxpayers. also touch on the impact of global tax trends, specifically the OECD’s pillar one and pillar two frameworks. 

00:10 Introduction and Welcome
00:37 Election Cycle Updates
01:50 Tax Proposals for Individuals
08:49 Tax Proposals for Small Businesses
15:15 Venture Capital and Fuel Excise
18:01 Unenacted Measures and Future Proposals
28:47 Conclusion and Final Thoughts