Why the ATO is targeting baby boomer wealth

The ATO believes wealthy baby boomers, particularly those with family-controlled businesses, are structuring asset disposals in ways that may not align with tax obligations.

If you're in the ATO’s Top 500 or Next 5,000 programs, expect scrutiny on how funds move through your entities. Even if you are not in these groups, it is important to ensure you are careful in how you look to achieve your commercial and succession planning objectives.

Many business owners seek to benefit from their enterprises and take advantage of legal methods to minimise their tax obligations. However, if the sole or dominant purpose of an arrangement is to obtain a tax benefit, the ATO may investigate and deny benefits under anti-avoidance laws. In essence, tax law allows you to minimise your tax, but it doesn’t allow you to take steps that are motivated for the sole or dominant purpose of obtaining a tax benefit. 

ATO's key concerns:

•    Division 7A loans – Loans quickly settled via distributions to remove them from records.
•    Asset transfers – Unrecognised values raising tax avoidance concerns.
•    Family interests restructured.
•    Amendments to trust deeds.
•    Restructuring delaying tax lodgements.
•    Financing received from overseas – particularly in the property and construction industry

Trusts under scrutiny

Trusts remain a major focus. If a trust with a family trust election (FTE) or interposed entity election (IEE) distributes outside its family group, a 47% tax applies. The ATO is also enforcing stricter reporting for closely held trusts, requiring trustee beneficiary (TB) statements to cross-check beneficiary tax declarations. Failure to submit a TB statement on time risks a 47% non-disclosure tax.

Minimising risk

If you control multiple entities, particularly high-value ones, review connections between them—domestic or overseas—to avoid tax issues. Transferring control of a business often involves restructuring, such as altering share structures, trustees, partnerships, or using trusts. Each action carries legal and tax implications that require careful planning.

Legitimate approaches to managing your family’s affairs

We applaud the ATO’s efforts to ensure every Australian pays their fair share of tax. We also believe that families who have worked hard over many years to build businesses you be able to continue those businesses through multiple generations if they choose to. These two fundamental pillars underpin our approach to working with clients to legitimately manage their affairs to ensure they continue to thrive and flourish.