Tax Bites: Insights on tax developments

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

In this quickfire episode of the Herbert Smith Freehills Tax Bites podcast, Australian tax partners Toby Eggleston and Ryan Leslie, along with Senior Associate Naison Seery, discuss the recently released Treasury consultation paper proposing changes to the foreign resident capital gains tax regime. Key topics include broadening the classification of assets subject to tax, updates to the principal asset test to a 365-day rule, and new notification requirements for the sale of assets over $20 million. The hosts delve into the potential implications of these changes, discuss uncertainties, and invite feedback before the August consultation deadline.00:09 Introduction00:28 Overview of Foreign Resident Capital Gains Tax Changes01:02 Current Tax Base for Foreign Residents02:48 Proposed Changes to the Tax Base05:27 Detailed Breakdown of Proposed Measures11:32 Principal Asset Test Changes14:16 Notification Requirement for High-Value Transactions19:29 Closing Thoughts and Consultation Details

In this special late night edition of the Tax Bites podcast Professor Graham Cooper, Nick Heggart, Ryan Leslie and Toby Eggleston delve into the key tax-related aspects of Budget 2024. The discussion begins with general observations about the budget's minimalistic approach to new tax measures before shifting to specific changes, such as the unexpected adjustments to the capital gains tax (CGT) regime for non-residents, aiming to align with OECD standards, yet raising questions about compatibility with existing treaties. Additionally, the podcast covers minor tweaks to the CGT non-resident withholding regime, the issuance of tax incentives for critical minerals and green hydrogen production, and updates to anti-avoidance rules and intangibles taxation. Lastly, the continued extension of the small business instant asset write-off and increased funding for the ATO's Tax Avoidance Taskforce are mentioned as recurring elements in the budget. The podcast concludes with reflections on potential impacts and the broader implications for future tax policy ahead of the upcoming election.00:09 Welcome to the Budget 2024 Special Edition00:39 Initial Reactions to Budget 202400:48 Overview and Surprises in the Budget02:02 Deep Dive into Capital Gains Tax Changes for Non-Residents11:53 Exploring Tax Incentives for Future Growth15:29 Shifting Gears: From Intangibles to Anti-Avoidance Measures21:01 Wrapping Up: Budget Analysis and Final ThoughtsOur budget Tax Note can be found here.

In this episode of the Herbert Smith Freehills Tax Bites podcast, Toby Eggleston partners with Consulting Professor Graham Cooper and fellow partner Ryan Leslie to dive deep into recent Federal Court decisions on the anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936. The discussion begins with insights into the Minerva Financial Group vs. Commissioner of Taxation, highlighting the saga of restructuring for an IPO and the accompanying tax implications. Also explored is the Mylan Australia Holdings case involving a debt push down strategy and the ATO’s application of Part IVA. The episode touches on pivotal aspects such as the significance of counterfactual scenarios, determination of tax benefits, and the overarching question of dominant purpose in context to Part IVA. The conversation also delves into the potential implications of the 2012 amendments compared to the pre-amendment rulings and foreshadows the impact of recent budget announcements on future tax avoidance disputes.00:00 Welcome to the Tax Bites Podcast00:32 Deep Dive into Part IVA Decisions: Minerva Financial Group Case14:04 Exploring the Mylan Australia Holdings Case: A Debt Push Down Analysis30:01 Impact of 2012 and 2023 Part IVA Amendments on Tax Law40:33 Final Thoughts and Future Directions in Tax LawWant to go deeper? Read our tax notes on the casesMinerva Financial Group Pty Ltd v Commissioner of TaxationMylan Australia v Commissioner of Taxation: The Commissioner loses again on Part IVA

In this episode associate Mark Peters and partner Toby Eggleston discuss the potentially huge changes to the stamp duty regime in Victoria for commercial property. While it initially sounds straightforward, there are a number of nuances and potential issues for future transactions.More details can be found in our tax insights.

In this episode associate Geraldine Chan and partner Ryan Leslie join Toby Eggleston to discuss the main takeaways of the Commissioner’s win in the PepsiCo case. More details can be found in our tax insights blog.

In this episode new partner James Pettigrew and Professor Graeme Cooper joins Toby Eggleston to discuss the proposed debt creation regime, dropped into the thin capitalisation bill at the last minute. More details can be found in our tax insights here. 

In this episode stamp duty specialists Jinny Chaimungkalanont and Dan Miles educate income tax partner Toby Eggleston on the latest developments in Australian state taxes. Topics include the Victorian State budget, NSW changes to landholder duty for listed entity takeovers (look out!), NT and WA updates and rounding it out with a summary of 3 important cases handed down in May. More details can be found in our tax insights:2023-24 Budget Update: Key changes to Australian state taxes (23 May) Duties Alert: Reform to NSW Landholder Duty for Listed Landholders and Widely Held TrustsDecision Alert: NSW Court of Appeal overturns decision that power generation assets were not “goods” for the purposes of landholder duty2023-24 Budget Update: Key changes to Australian state taxes (9 May)

In this episode partners Toby Eggleston, Ryan Leslie and Nick Heggart and consulting Professor Graeme Cooper breakdown the Australian Federal budget and the implications for large taxpayers. Topics include proposed changes to Part IVA, build to rent incentives, Pillar 2 update and a special section for the mining sector. All you need in 26 minutes!More details can be found in our tax insight: https://hsfnotes.com/taxaustralia/2023/05/09/tax-insight-tax-measures-in-australias-2023-24-budget/

In this episode in our Tax Bites series, Professor Graeme Cooper and partners Ryan Leslie and Toby Eggleston unpack the just released Exposure Draft on changes to Australia’s thin capitalisation regime aimed at limiting interest deductions for Australian taxpayers. 30 years of tax history packed into under 30 minutes!More details here: https://hsfnotes.com/taxaustralia/2023/03/17/tax-insight-new-limits-on-deducting-interest/

In this episode Mark Peters and Toby Eggleston discuss the latest in the world of NSW stamp duty. A must listen for those in property and infrastructure.More details can be found on blog here: https://hsfnotes.com/taxaustralia/2022/11/15/nsw-stamp-duty-reforms-change-of-beneficial-ownership-where-have-we-landed-significant-changes-to-leases-and-option-transactions/

In this third episode in our series, Professor Graeme Cooper and partners Toby Eggleston and Ryan Leslie share insights on the 2022 Federal Budget.

In this episode Professor Graeme Cooper and partner Toby Eggleston dissect the Treasury Consultation Paper on Multinational tax integrity and enhanced tax transparency.More details can be found on blog here: https://hsfnotes.com/taxaustralia/2022/08/15/tax-insight-treasury-consultation-paper-international-tax-measures/

In the first episode of our Tax Bites podcast series, Stamp duty partner Jinny Chaimungkalanont enlightens tax partner Toby Eggleston on all the happenings in the world of stamp duty.