The ART decision in XLZH v FCT looked at whether pre-CGT assets owned by a discretionary trust kept that status under Division 149 and to the extent to which ATO Ruling IT 2430 can be relied upon in applying Division 149.

#CGT, #Division 149, #discretionary trusts, #Tax, #IT 2430

The recent Federal Court decision in ASIC v Darranda Pty Ltd [2024] FCA 1015 highlights that where a franchisor designs the systems, documents or marketing used by franchisees, it may be held liable for regulatory breaches in its network, even without direct dealings with consumers.

#franchising #franchisorliability #ASIC #RegulatoryCompliance

New Division 296 tax, as outlined in a Treasury Fact Sheet, includes two indexed thresholds ($3 million and $10 million) and taxation on realised (not unrealised) earnings from 1 July 2026. However, critical details about how realised earnings will be calculated—particularly regarding pre-1 July 2026 gains—remain unclear.

Division 296 tax to be amended to remove taxation of unrealised capital gains, according to a media release by Federal Treasurer Jim Chalmers.

The 28 August 2025 decision of the Court of Appeal of New South Wales in Netdeen Pty Ltd (t/as GJ Gardner Homes) v Lindfield NSW Pty Ltd[i] highlights several important considerations for franchisees and franchisors alike when changing a business structure.

Franchisors should have consideration to the impact that this may have on their existing contractual obligations. Franchisees need to be aware of whether their existing agreements allow for this possibility and consider this prior to entering into a franchise agreement.

The decision also highlights the importance of clear drafting in contracts, even where there has been ostensible agreement between the parties.

The article explains the arguments contained in the parties’ submissions to the High Court in the appeal by the Commissioner of Taxation (Commissioner) from the Full Federal Court’s (Full Court) decision in Commissioner of Taxation v Bendel [2025] FCAFC 15 (Bendel). 

This article is the third in a three-part series setting out practical solutions to common issues in super, tax and estate planning, with a particular focus on the tax impact of payments to beneficiaries.

Part 3 of our series looks at the tax issues which should be considered when paying death benefits in specie, including capital gains tax and the super ‘death tax’.

This article is the second in a three-part series setting out practical solutions to common issues in super, tax and estate planning, with a particular focus on the tax impact of payments to beneficiaries.

This article is the first in a three-part series setting out practical solutions to common issues in super, tax and estate planning, with a particular focus on the tax impact of payments to beneficiaries.

Part 1 of our series looks at how withdrawing super benefits before death can form part of a member’s overall estate planning.

The Federal Court decision in Girchow Enterprises v Ultimate Franchising Group [2023] FCA 420 is a reminder that if you make financial claims about future profits or startup costs without a solid basis, you could be liable for misleading and deceptive conduct under the Australian Consumer Law.

The ACCC has issued penalties to Cash Converters and Mobile Travel Agents for breaching the Franchising Code of Conduct by failing to update required information on the Franchise Disclosure Register.

Post the ASIC civil penalty proceedings against RAMS Financial Group over alleged systemic misconduct in its home loan operations a class action by former franchisees is now seeking to intervene in the ASIC matter, citing overlapping factual issues and concerns over reliance on Westpac’s internal findings.  #franchising #disclosure #franchisor_liability

On 12 June 2025, the High Court granted the Commissioner special leave to appeal the decision of the Full Federal Court in FCT v Bendel [2025] FCAFC 15 (Full Court Decision) that we wrote about here.

The Schaper report in December 2023 recommended further evaluation of the merits of replacing the Franchising Code of Conduct with a licensing regime. This recommendation arose after a submission to the review by the Australian Competition and Consumer Commission. Without detail of what a licensing regime may look like there is uncertainty about what any licensing regime may require. The recent case of ASIC v RAMS however provides an illustration of the effect a licensing regime may have on a franchisors. Click here to read more.

#franchising #licensing #franchisor_liability

The language used in a contract can significantly impact its enforceability. Reliance on the incorporation of an obligation to act in good faith will not necessarily result in an outcome sought. This was considered in the recent Supreme Court decision in Beecham Motors Pty Ltd v General Motors Holden Australia NSC Pty Ltd, which provides guidance for those with or considering a franchise agreement and the drafters of franchise agreements. #franchise_agreements #good_faith #franchisee_group_action

On 6 March 2025, Associate Justice Barrett handed down his decision in the matter of Duke Ventures Wellington Street Pty Ltd [2025] VSC 75. In this case, the Court clarified when a debtor can rely on an offsetting claim to set aside a statutory demand in a dispute adjudicated under the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOPA).

#insolvency #statuory_demand  #creditors #securityforpayments

Our recent article on the proposed Division 296 tax has sparked some discussions, particularly as to whether benefits should be taken out and, if so, when they should be taken out.

With the recent Labor election victory, and a potentially friendlier Senate, it is likely that the proposed Division 296 tax of an additional 15% on members with a $3 million or more total super balance (not indexed) will be enacted. See here for our previous commentary on the measure.

The Full Federal Court case of Commissioner of Taxation v Liang [2025] FCAFC 4 serves as a reminder that when challenging an ATO decision at a court or tribunal, it is the taxpayer who carries the burden of proving that an assessment is excessive and what the assessment should have been.

The matter of Ford Kinter & Associates Pty Ltd v Reliance Franchise Partners Pty Ltd (in liq) [2025] FCA 139 emphasises the important role that creditors can play in facilitating asset recovery during insolvency proceedings. It further examines the broad discretionary powers the courts have under section 564 of the Corporations Act 2001 (Cth) (the Act), which enables courts to reward creditors who take on the financial risks of litigation to be prioritised when recovering company property or expenses in a winding up due to the risk assumed by them. In doing so, the court considers the public interest in encouraging creditors to provide indemnities so as to enable assets to be recovered.

#insolvency #liquidation #creditors #publicinterest

Withholding information whilst negotiating agreements can amount to misleading and deceptive conduct. However, the recent Supreme Court decision in Sec New Line Pty Ltd v Muffin Break Pty Ltd provides important guidance on when silence will become deceptive, specifically in the context of lease and franchising renewals.