Tax Bites: Insights on tax developments

In this episode of Tax Bites, Toby Eggleston and Mark Peters unpack the Victorian and New South Wales ISPT landholder-duty decisions. They examine how a staged acquisition of a widely held property trust produced a substantially higher duty liability than ISPT argued for. The discussion highlights why transaction sequencing, thresholds, entity status and jurisdiction-specific rules must be assessed together when structuring acquisitions of interests in landholding trusts and companies.More detail in our tax note here

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-off00:41 Corporate Tax Overview01:53 Non-Resident CGT Reboot03:14 Venture Capital and R&D05:16 Small Business Reliefs06:20 Loss Carry-back Returns08:44 Big Shift to Personal Tax08:47 CGT Discount Ends10:52 Tech and Startup Fallout15:01 Negative Gearing Overhaul16:51 Discretionary Trusts Seismic21:37 Late Night Wrap Up

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 here00:10 Welcome and agenda00:32 Budget shock announcement02:34 Overview of reforms02:57 Expanded real property definition06:25 Assets newly in scope09:07 Uncertainty and edge cases11:25 Retrospective start dates14:39 Treaty override explained23:26 Indirect interest test changes27:54 Renewables CGT discount31:14 Withholding and notifications34:18 Consultation and wrap up

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 Welcome00:25 Why Earnouts Matter01:26 ATO Views Over Time05:44 TOFA as the starting point07:27 TOFA Mechanics and Timing09:27 Business Sale Exception Tests10:53 Structuring Contingencies13:26 In or Out of TOFA17:37 Outside TOFA and Look Through Earn out rights18:46 Look Through Requirements20:12 Five Year Rule Pitfalls23:39 Wrap Up and Key Takeaways

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 agenda00:32 ATO consultation: Section 128F public offer IWT exemption (what’s changing)02:06 128F in practice: private credit complexity & evidence you’ll need03:53 Key takeaway: get 128F advice early before lender discussions04:30 Back-to-back CGT rollovers: why the ATO is preparing guidance05:04 Top-hat restructures, Bailador example & Part IVA risk focus07:38 AusNet fallout, policy debate & Board of Tax review on rollovers09:41 Board of Tax review: Thin cap reforms - scope, pain points, what may change13:42 FIRB tax conditions: new tailored approach & the ATO tax questionnaire16:30 Wrap-up: what we’re watching for in tax in 2026

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

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 ConclusionRead more on our HSF Kramer tax note.

In this episode of the Herbert Smith Freehills Kramer 'Tax Bites' podcast, host Toby Eggleston alongside Professor Graeme 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 Welcome00:54 Overview of Thin Capitalisation Rules02:56 Third Party Debt Test Explained06:11 Emerging Issues with Third Party Debt Test12:34 Practical Challenges and Industry Reactions20:14 Conduit Financing and Swap Costs28:04 Draft Practical Compliance Guide (PCG) PCG 2025/D244:01 Closing Remarks and Farewell

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 Greetings00:31 Overview of Section 899 and Its Implications00:56 Background and Legislative Process01:52 Impact on Australian Firms and Government05:26 Unfair Foreign Taxes Defined10:29 Potential Triggers and Affected Taxes11:53 Impact on Australian Taxpayers and Government16:52 Modifications to BEAT Rules20:50 Treaty Interactions and Future Implications23:23 Conclusion and Final Thoughts

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 Welcome00:37 Election Cycle Updates01:50 Tax Proposals for Individuals08:49 Tax Proposals for Small Businesses15:15 Venture Capital and Fuel Excise18:01 Unenacted Measures and Future Proposals28:47 Conclusion and Final Thoughts