August 2026 Update

Trust Distributions, Side Hustles, Car Purchases & Super: Your August 2026 Tax Update

This month brings a landmark court decision, a timely reminder for anyone earning through Uber, Airbnb or freelance platforms, fresh limits for business vehicle purchases, and a significant change to how self managed super funds can borrow to buy property. Whether you run a business, manage a trust, drive for a rideshare app on weekends, or are planning your next car purchase, there is something here worth a few minutes of your time.

Let's break down the four biggest developments and what they mean for you, in plain English.

1. The High Court Just Made Life Easier for Trusts (With a Catch)

If your business uses a discretionary trust alongside a company, this one is important. In Commissioner of Taxation v Bendel [2026] HCA 18, handed down on 10 June 2026, the High Court rejected the ATO's long-held position that an unpaid trust distribution owed to a corporate beneficiary automatically counts as a "loan" under the Division 7A rules.

In plain terms: many businesses distribute income to a corporate beneficiary (taxed at the lower company rate of 25% or 30%) while leaving the cash sitting in the trust to fund working capital or growth. Until now, the ATO generally treated that unpaid amount as a loan, meaning businesses often needed formal loan agreements, benchmark interest rates and annual repayments to avoid a deemed dividend. That created real administration and cash flow headaches.

The ATO has confirmed it will generally apply the Court's decision, giving many business groups greater certainty about funds retained within their trusts.

The catch: if you already have a formal loan agreement in place because of the ATO's old position, you can't just unwind it. Minimum repayments still need to continue until the loan is repaid. Other rules, including section 100A, can also still apply where the real benefit of a distribution ends up with someone other than the beneficiary. And on the horizon, the Government has flagged a 30% minimum tax rate for discretionary trusts from 1 July 2028, plus possible changes to bring Division 7A back into play for unpaid distributions.

What to do now: If your group uses trust and company structures, it's a good time to review your distribution resolutions, existing loan agreements and record-keeping. Talk to us before assuming the Bendel decision resolves everything.

2. Earning Through Uber, Airbnb or a Side Hustle? The ATO Is Watching Closely

Driving for a rideshare service, renting out a room on Airbnb, freelancing, hiring out equipment, or selling digital content on the side has become a normal way for many Australians to top up their income. What sometimes comes as a surprise is that this income generally needs to be declared, and it isn't always pre-filled in your tax return the way salary and wages are.

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Under the Sharing Economy Reporting Regime (SERR), many platforms now report transaction data straight to the ATO, covering ride-sourcing, short-term accommodation and a growing range of personal services. That data gets compared against what taxpayers actually report, and mismatches can lead to questions, adjustments, interest or penalties.

📖 What counts as sharing economy income?

• Ride-sourcing through Uber or DiDi.
• Short-term accommodation via Airbnb or Stayz.
• Hiring out cars, caravans, tools, parking or storage space.
• Freelance or task-based work such as deliveries, cleaning or graphic design.
• Digital content, streaming, or tips earned through online platforms.

A few habits make tax time far less stressful: keep your own records rather than relying solely on platform summaries, track deductible expenses like platform fees and vehicle costs, and set money aside as you earn it since tax usually isn't withheld along the way. If you're driving for a rideshare service, remember GST registration is required regardless of your turnover.

What to do now: If you've earned sharing economy income this year, review your records now rather than at lodgement time. We can help confirm what's deductible and make sure your reporting lines up with what the platforms are sending the ATO.

3. Buying a Business Vehicle? The 2026-27 Thresholds Have Changed

If a new car is on the cards for your business this financial year, the updated thresholds that apply from 1 July 2026 are worth understanding before you sign anything. They affect how much depreciation you can claim, the GST credits available, and whether luxury car tax applies.

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• Car limit: $69,883 for vehicles first used or leased in 2026-27. This caps how much of a passenger vehicle's value can be depreciated for tax purposes, no matter what you actually paid.
• GST credit cap: $6,353 (one-eleventh of the car limit). Even on a pricier car, the GST credit generally won't exceed this, though GST is still payable on the full sale price when you eventually sell.
• Luxury Car Tax thresholds: $91,661 for fuel-efficient vehicles (including many hybrids and EVs) and $80,809 for all other vehicles. LCT applies at 33% of the value above the relevant threshold.

A vehicle priced around the car limit often delivers similar practical benefits while maximising the deductions and GST credits you can actually claim.

Remember, if the vehicle has any private use, you can generally only claim the business-use portion, so a logbook and odometer records are worth keeping from day one. Before signing a contract, it's worth weighing up the full after-tax cost of ownership, whether buying or leasing suits you better, and how the purchase fits your broader cash flow.

What to do now: Talk to us before you commit to a vehicle purchase or lease so we can model the likely tax outcome for your specific situation.

4. Self Managed Super Funds Face New Borrowing Restrictions

As part of securing passage of the negative gearing and CGT discount changes announced in the May 2026 Federal Budget, the Government has tightened the rules around how self managed super funds (SMSFs) can borrow to buy property. This change became law on 26 June 2026.

SMSFs can borrow in limited circumstances to purchase a single asset through a limited recourse borrowing arrangement (LRBA), most commonly property. Previously there was no restriction on the type of real property involved. Now, any property purchased this way must meet the "business real property" (BRP) definition, which is based on how the property is used rather than its zoning or original design.

📖 What does "business real property" mean?

It's property used wholly and exclusively for business purposes. This is about actual use, not appearance, so a residentially designed building used entirely as a medical practice could qualify, while a mixed-use residential and retail property on one title might not.

Although this has been described in the media as a ban on SMSFs buying residential property, the reality is more nuanced given the BRP test is about usage. A 45-day transitional period applies, ending 10 August 2026, which may allow arrangements already being implemented on non-BRP assets to proceed where the purchase contract was entered into on or before 10 August 2026, even if settlement happens later. Existing LRBAs over non-BRP assets can continue and can generally still be refinanced, subject to lender approval.

What to do now: If you're an SMSF trustee currently arranging a property purchase through an LRBA, seek specialist SMSF advice urgently to confirm whether the transitional rules apply to you before the 10 August 2026 cut-off.

Frequently Asked Questions

Does the Bendel decision mean my trust no longer needs to worry about Division 7A?

No. It means an unpaid distribution isn't automatically a Division 7A loan, but other rules, including section 100A, can still apply, and existing complying loan agreements can't simply be unwound.

Do I need to declare income from Uber, Airbnb or freelance platforms?

Yes. This income is generally assessable and needs to be declared, even if it's occasional or modest, and many platforms now report directly to the ATO.

What is the car limit for 2026-27?

$69,883 for vehicles first used or leased in the 2026-27 income year, capping depreciation deductions and GST credits for passenger vehicles.

Can my SMSF still borrow to buy residential property?

From 26 June 2026, an SMSF borrowing to buy property generally needs the property to meet the business real property definition. A 45-day transitional period, ending 10 August 2026, may cover arrangements already underway.

The Bottom Line

From a landmark court decision on trust distributions to new limits on business vehicles and tighter SMSF borrowing rules, there's a lot moving this month. None of these changes are reasons to panic, but each one is worth a conversation, especially with transitional deadlines already in play for SMSF trustees.

If any of these developments touch your business, trust, super fund or side hustle, our team at JPR Business Group is here to help you understand exactly what it means for you and what to do next.

Contact JPR Business Group

Disclaimer: This blog is for educational purposes only and does not constitute formal financial or tax advice. Please consult a professional for advice specific to your situation.