The Australian Taxation Office is signalling a stepped-up focus on privately owned and wealthy groups, and this time the message is broader and more behavioural than technical. Rather than highlighting isolated issues, the ATO’s recent updates make it clear that patterns of behaviour, governance frameworks and transparency increasingly determine whether a private group will attract attention.
Over the past few years the ATO has progressively integrated data analytics, automated matching and industry benchmarking into its risk detection capabilities. As a result, outcomes that appear inconsistent with a group’s economic performance, or with comparable peers, are more likely to trigger review. Where tax results, structures or transaction histories sit well outside expected norms, the ATO will want a clear explanation.
At its core, the ATO’s focus areas emphasise governance and transparency. Groups that have robust documentation, clear commercial rationale for transactions and appropriate oversight mechanisms are less likely to be scrutinised, even if their affairs are complex.
Where internal controls are weak, advisers are overly influential without appropriate challenge, or tax positions rely on contentious interpretations of the law, risk increases. Importantly, the ATO expects advisers to act as a moderating influence rather than an accelerant of aggressive positions.
Failure to meet basic registration, reporting or payment timelines still attracts attention, but so does incomplete or inaccurate reporting of income, deductions or tax credits. Capital gains tax concessions, small business rollovers and trust distribution strategies remain areas of interest, particularly when eligibility requirements are not clearly documented or satisfied.
In practical terms, the ATO is watching how groups manage and report transactions between entities, how they use business funds for private purposes, and how shareholder loans and related party dealings are structured and recorded. Division 7A compliance continues to be raised as a frequent source of unintentional non-compliance, with the ATO emphasising accurate record keeping, correct loan documentation and appropriate minimum yearly repayments.
Emerging focus areas also reflect broader economic activity: Property, construction, private equity, cross-border dealings and crypto assets are all subjects of specific attention, often because these sectors combine frequent transactions, valuation complexity and opportunities for misclassification.
The common thread is not just technical intricacy but whether tax positions are supported by documentation and reflect commercial reality. They have been particularly explicit about behaviours that elevate risk, including lifestyles that appear inconsistent with reported after-tax income, the use of structures or transactions that shift wealth without clear business purpose, and selective engagement or minimal participation in the tax system. These behavioural indicators have historically featured in large corporate compliance programs; their prominence in guidance for private groups underscores how the compliance environment is tightening.
Engagement with the ATO is increasingly about demonstrating rigour, preparedness and confidence in your tax positions. Groups that can show they have governance frameworks, risk assessment processes and documented commercial rationales for key decisions will have a much stronger footing if queries arise.
Actionable points for private groups to consider now
- Review whether your tax outcomes are broadly aligned with peers and economic performance benchmarks
- Confirm that material transactions have clear commercial rationales and appropriate documentation
- Strengthen governance and internal controls, particularly around tax reporting and adviser influence
- Ensure inter-entity transactions, shareholder loans and related party dealings are compliant and properly recorded
- Check that concessions and rollovers you claim have supporting evidence of eligibility
- Regularly reconcile reporting to avoid incomplete or inaccurate tax returns, activity statements or schedules
The fact that the ATO has published this guidance is itself a signal. Scrutiny is increasing not because private groups are assumed to be non-compliant, but because greater transparency and better governance are expected as part of mature tax leadership. There is value in reassessing positions now rather than waiting for automated matches or benchmarking algorithms to trigger contact.
For full details of what attracts the ATO’s attention, you can review the complete ATO guidance here: https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/privately-owned-and-wealthy-groups/what-attracts-our-attention.
If any of these themes resonate with your group, or you would like to review your governance and compliance framework, we’re here to assist. Understanding risk before it is escalated preserves value and gives you control over how your affairs are positioned.