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    Uber travel expenses not FBT-exempt

    The ATO has clarified that any benefit arising from travel by taxi, and not a ride-sourcing service, by an employee is exempt from fringe benefits tax (FBT) if the travel is a single trip beginning or ending at the employee’s place of work.

    In particular, the exemption is limited to travel in a vehicle licensed by the relevant state or territory to operate as a taxi. It does not extend to ride-sourcing services provided in a vehicle that is not licensed to operate as a taxi, such as Uber.

    Any benefit arising from taxi travel by an employee is also an exempt benefit if the travel is:

    • a result of sickness of, or injury to, the employee, and
    • the whole or a part of the journey directly between any of the following:
      • the employee’s place of work
      • the employee’s place of residence, and
      • any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.

    If you have any questions regarding the above matters, please do not hesitate to contact us.

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au

    Read more about business tax.

    The Bill containing the three-stage personal income tax cuts package completed passage through parliament and is now law.

    The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 has received assent as Act No 52 of 2019 and fully implements the measure announced in the 2019 Federal Budget. The measure amends the tax law to lower taxes for individuals, including changes to the low and middle income tax offset (LMITO) from 2018/19 and the low income tax offset from 2022/23. The Bill also amends the personal income tax rates and thresholds from 2022/23.

    ATO administration of amendments

    The ATO is making system changes to ensure amendments to the LMITO will be taken into account for 2018/19 tax returns that have already been lodged such that taxpayers will receive the appropriate refunds reflecting their entitlement to the increased LMITO, according to income level and tax paid. The changes to the offset will also be taken into account for those yet to lodge their 2018/19 return.

    If you have any questions regarding the above matters, please do not hesitate to contact us. Read more Personal Wealth Management articles.

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au

    In February this year, the Government passed legislation which prevents trustees of APRA-regulated funds from providing insurance to members with inactive superannuation accounts, unless a member has directed otherwise.

    It is a common practice for many individuals with an SMSF to also have a secondary APRA-regulated fund which provides them with insurance.

    This may be done for two key reasons:

    • To access insurance policies provided through large superannuation funds which are often cheaper.
    • To keep legacy insurance policies which may offer better benefits or lower premiums than new policies, especially for older members.

    In these circumstances, it is most likely that people holding these polices through an APRA-regulated super fund will consider that their SMSF is their primary superannuation account and therefore receives all their contributions and roll-overs.

    It is usually the case that people will leave enough money in their APRA-regulated fund account to cover the cost of insurance premiums. Where required they may rollover funds from their SMSF to their APRA-regulated fund or make a contribution to pay for insurance premiums and administration fees to keep their insurance policy.

    Under the new legislation, you now may lose your insurance cover if your APRA-regulated fund is considered inactive because it has not received a contribution or a rollover for a continuous period of 16 months.

    At 1 July 2019, if your APRA-regulated fund is considered inactive for 16 months your insurance will be terminated.

    APRA-regulated funds had until 1 April to identify members who have been continuously inactive for six months or more and now have until 1 May to inform those inactive members that their insurance will soon be switched off unless they elect to retain it.

    We are concerned that insurance will be unknowingly closed for these accounts because members have not checked their correspondence, especially for those who rely on this insurance held separately.

    This could have a devastating impact on policy holders or their beneficiaries if their insurance cover was unknowingly terminated. Furthermore, it may be extremely difficulty or costly to try and access insurance at a later stage of life.

    So what can you do?

    It is important that if you wish to maintain your insurance cover that you take necessary steps as soon as possible. This includes either:

    • Providing a direction to your APRA-regulated fund that you wish to ‘opt-in’ for your insurance cover to be maintained.
    • Making a contribution or rollover to your ‘inactive’ APRA-regulated fund so that the period for which your fund starts to be inactive is reset. However, it stressed that you also ‘opt-in’.

    How can we help?

    If you are concerned you are going to be affected by these changes or need assistance with your insurance, please feel free to give Cayle Petritsch or Martin van der Saag a call. Read more Financial Industry articles.

    The ATO will take strong actions against false clothing and laundry work-related expense claims this Tax Time.

    Assistant Commissioner Karen Foat said although many Australians claim clothing and laundry expenses, it is unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income.

    The ATO is concerned about the number of people claiming deductions for conventional clothing. Some retail workers claim normal clothes because they are told to wear a certain colour, or items from the latest fashion clothing line. Others think they can claim normal clothes because they only wear them to work.

    The ATO reminds taxpayers that an official dress code does not qualify as a uniform. A claim cannot be made for normal clothing, even if an employer requires the taxpayer to wear it, or only wear it to work.

    Taxpayers who cannot substantiate their claims should expect them to be refused, and may be penalised for failing to take reasonable care when submitting their tax return.

    If you have any questions or concerns about your work-related clothing, laundry and dry-cleaning expense deduction claims, please do not hesitate to contact us. Read more Personal Tax articles.

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au

    Company tax cuts

    For 2018/19 income year, companies with an annual aggregated turnover under $50m will have a reduced tax rate of 27.5%. To be eligible for the reduced rate, the company must be a base rate entity.

    Instant asset write-off increased, extended and allowed for medium-sized businesses

    The $20,000 instant asset write-off for small business has been increased to $30,000 from 2 April 2019. The scheduled end date of the write-off has been extended from 30 June 2019 to 30 June 2020.

    Also, there is another limit of $25,000 which is available from 29 January 2019 to 2 April 2019.

    For medium-sized business, which is defined as being over $10m in aggregated turnover but under $50m, an entitlement to a $30,000 instant write-off is allowed until 30 June 2020. The assets must be purchased after 2 April 2019.

    Single touch payroll

    Entities who are employers are required to report the following information to the ATO from 1 July 2019:

    •  withholding amounts and associated withholding payments, on or before the day by which the amount is required to be withheld
    •  salary or wages and ordinary time earnings information on or before the day on which the amount is paid, and
    •  superannuation contribution information on or before the day on which the contribution is paid.

    There are some exceptions to the single touch payroll allowed for employers who only make payments to closely held employees.

    Non-compliant withholders to be denied tax deductions

    From 1 July 2019, businesses will no longer be able to claim deductions for payments to their employees where they have not met their PAYG obligations. This includes where the employer is required to withhold PAYG from gross payments, but fail to report or remit it to the ATO.

    PAYG withholders will be required to ensure that all lodgements are made on time to avoid large penalties with denied tax deductions.

    Additionally, the deduction for businesses on certain payments to contractors which have not met PAYG obligations will be denied unless a genuine mistake has been made.

    Taxable payments reporting system

    Beginning with the 2018/19 income year, the following industries have introduced a taxable payments reporting system:

    •  Couriers
    •  Cleaners

    Starting from 1 July 2019, the taxable payments reporting system will be extended to include the following industries:

    •  Security services
    •  Road freight
    •  IT services

    Entities who engage contractors, or subcontractors, will need to provide additional reports to the ATO. This treatment has the same requirements as salary and wage employees.

    Similar business test

    A company is now allowed to claim a prior year loss against business profits as long as it satisfies the similar business test from 1 July 2015. This test adds on to the same business test, which was less flexible to pass.

    The former same business test is failed unless the company carries on the same business and has not derived income from any new kinds of business or transactions. The new test makes it easier for companies to pass where early investors have entered the company ownership.

    As the legislation takes effect as of 1 July 2015, companies in this position have an opportunity to amend income tax returns from the 2015/16 income year. Also, a company going back and amending their tax return to include the company loss deduction would do so in that prior year at a higher company rate. However, careful analysis of the company loss is advised.

    Fodder storage assets allowed immediate write-off

    For primary producers, a new law has been enacted which allows fodder storage assets to be immediately written off.

    Fodder storage assets may include silos and hay sheds, and are used to store grain and other animal feed. The immediate write-off will apply if the asset is purchased and first installed ready for use on or after 19 August 2018.

    R&D tax incentive change not law

    The research and development (R&D) tax incentive was due to be amended for income years starting 1 July 2018. Under the announcement, the incentive would have been based on an uplift of the entity’s corporate tax rate in the particular income year.

    However, changes relating to a company’s “R&D intensity percentage” have not become law. All rules as they related to R&D have not changed for companies.

    If you have any questions regarding the above points raised, please do not hesitate to contact us.

    Martin van der Saag
    Partner
    T: 02 9984 7774
    E: martinv@northadvisory.com.au

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au

    Read more about business tax.

    Change for low income tax offset and LAMITO

    A low and middle income tax offset (LAMITO) was introduced on 1 July 2018. The offset will run in conjunction with the low income tax offset as a targeted reduction of income tax for Australian residents.

    The LAMITO provides an additional offset of up to $200 for individuals on a taxable income of $37,000 or less. Taxpayers up to $48,000 will get an increased LAMITO up to the maximum amount of $530.

    The maximum LAMITO will be available for incomes up to $90,000, and will phase out for individuals with a taxable income of $125,333.

    The LAMITO will be available for four years, ending with the 2021/22 income year. At this point, further income tax reductions will absorb the LAMITO.

    Personal income tax cuts

    For the 2018/19 income year, the top of the 32.5% tax bracket has moved from $87,000 to $90,000. That means that individuals above $90,000 in taxable income will save $135 in income tax this year compared to last year.

    CGT main residence removal for foreign residents still not law

    It was announced on 9 May 2017 that foreign residents would no longer have access to the CGT main residence exemption. Coupled with this, a grandfathering arrangement was in place where a foreign resident could still use the main residence exemption up until 30 June 2019.

    However, at the time of writing, this legislation has not passed through parliament, meaning no changes have been made for individuals in this situation.

    “Catch-up” superannuation contributions

    Starting from 1 July 2018, the “catch-up” superannuation contributions rules apply. For the current income year (2018/19), individuals can carry forward unused amounts up to the concessional contributions cap of $25,000.

    These rules are only in effect for individuals with a total superannuation balance of less than $500,000. This means the balance as at 30 June 2019 for individuals wishing to make a “catch-up” concessional contribution in the 2019/20 financial year. Unused amounts can be carried forward for five years.

    Individuals who anticipate an increase in income to a higher tax bracket in the 2019/20 financial year may wish to take advantage of a larger tax deduction.

    Downsizer contributions now available

    An individual who is aged 65 or over may make “downsizer contributions” from the proceeds of the sale of a dwelling that was the person’s main residence, applicable to the proceeds from contracts entered into on or after 1 July 2018.

    First home super saver scheme

    Voluntary contributions up to $15,000 can be made by an individual who has yet to purchase their first home into their superannuation account. The scheme allows the individual to withdraw this contribution plus earnings in order to be used for a first home deposit.

    Voluntary contributions made after 1 July 2018 may be used for withdrawal in the Scheme.

    HELP repayment levels set to change

    From 1 July 2018, students with a HELP debt may need to start repaying the debt on earning $45,000. This lower threshold is significantly lower than previous years ($51,957 in 2017/18), and is necessary for individuals who have become non-residents.

    Insurance policies in super to become “opt-in”

    Superannuation members who are inactive will need to “opt-in” with their life insurance and TPD providers from 1 July 2019 to retain their current policies.

    Inactive members are individuals who have not had a contribution or roll-over into their account for 16 months. As at 1 July 2019, this will apply for accounts without a contribution or roll-over since 1 March 2018.

    Work test exemption for low balance retirees

    The work test has been removed for recently retired individuals, commencing 1 July 2019. Announced in the 2018 federal budget, this applies to voluntary superannuation contributions for individuals over 65 years of age.

    For the first year in which an individual is greater than 65 years of age and does not meet the work test, a voluntary contribution may be made. However, this contribution will only be allowed if the individual met the work test in the previous year, regardless of whether they were under 65 years or not. Also, the member’s total superannuation balance at the beginning of the year needs to be under $300,000.

    Image rights to be included on individual returns only

    The use of “public fame” or “image rights” in a third party entity was due to be removed from 1 July 2019. This meant that using image rights would be restricted to individual returns. However, this proposal from the 2018 federal budget has not become law.

    Vacant land expenses no longer deductible for “build-to-rent”

    Claiming tax deductions during a “build-to-rent” investment has been proposed to stop from 1 July 2019. This measure was announced in the 2018 federal budget, but is yet to become law.

    A taxpayer may still be prudent to bring forward some payments, where possible, to claim a deduction this year. It is unconfirmed at the time of writing whether this announcement will be introduced into parliament in the future, still with the current expected start date.

    If you have any questions regarding the above points raised, please do not hesitate to contact us. Read more Personal Tax articles.

    Martin van der Saag
    Partner
    T: 02 9984 7774
    E: martinv@northadvisory.com.au

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au

    The Coalition Government has been re-elected in the 2019 Federal Election, with a small majority of seats in the House of Representatives, after taking a policy of stability for superannuation to the election.

    After the introduction of the significant legislative changes which came into effect on 1 July 2017, you may be relieved to hear that for at least the next three years we hope to have sustained stability for super. You may also be relieved to hear the proposal to ban refunds for excess franking credits and other superannuation changes will not be implemented. This means that you can focus on managing your financial needs rather than worrying about changing rules.

    Before the election, the Coalition did announce tweaks to the superannuation system that we anticipate will be implemented by the Government including:

    • Guaranteeing no new taxes on superannuation.
    • Greater flexibility for retirement contributions.
      • From 1 July 2020, Australians aged 65 and 66 will now be able to make voluntary superannuation contributions, both concessional and non-concessional, without meeting the work test. Previously, this was only available to individuals below 65.
      • This also includes extending access to the bring-forward arrangements to individuals aged 65 and 66 which allows individuals to make three years’ worth of non-concessional contributions to their super in a single year.
      • Increasing the age limit for individuals to receive spousal contributions from 69 to 74.
    • Reducing red tape for superannuation funds — exempt current pension income (ECPI) changes.
      • The Government will streamline administrative requirements for the calculation of ECPI.
    • Reducing costs for the super industry by including superannuation release authorities in electronic SuperStream Rollovers.
      • The Government will provide $19.3 million over three years beginning in 2020-21 to the Australian Taxation Office (ATO) to send electronic requests to superannuation funds for the release of money required under a number of superannuation arrangements.
    • Retaining limited recourse borrowing arrangements (LRBAs).
    • Increasing the maximum number of SMSF members from four to six.

    Next steps

    With the end of financial year now fast approaching and certainty with the Government and its super policies it is the time to ensure everything is in place for your SMSF before 30 June. I have compiled some strategies that you may need to consider and ensure the plans you have in place are the best for you and your SMSF.

    Contribution caps

    Before 30 June you should:

    • Review if you have any income available to contribute to your fund; and
    • Review your total contributions to ensure they are below the caps.

    Non-concessional (after tax) contributions are limited to $100,000 for the 2019 financial year and concessional (before tax) contributions are limited to $25,000.

    Members under 65 years of age have the option of contributing up to $300,000 over a three-period depending on their total super balance.  Transitional arrangements also apply to individuals who brought forward their non-concessional contribution caps in the 2016-17 financial year.

    Anyone making large superannuation contributions should exercise extreme care to avoid excess contributions.  Making sure you do not exceed the contribution caps will save you both money and time of dealing with excess contributions.

    Contributions are included in a financial year if they are received in your fund’s bank account by 30 June. With 30 June falling on a Sunday this year, it would be prudent to make your contributions by Wednesday 26 June to ensure they are received by your fund prior to the end of the financial year.

    Drawing superannuation pensions

    If you are in pension phase, you need to ensure the minimum pension has been paid to you for this financial year. Where these requirements have not been met your fund will be subject to 15% tax on your pension investments, rather than being tax free.

    Personal superannuation contributions

    Most people regardless of their employment arrangement, can claim a deduction for personal super contributions they make to their fund until they turn 75.

    Individuals who are aged between 65 and 75 will need to meet the work test to be eligible to claim the deduction.

    If you wish to claim a tax deduction for personal contributions, you must complete and lodge a notice of intent with your fund before June 30 and have this notice acknowledged (in writing) by your fund.  Any contribution also needs to be received by your fund before June 30.

    Co-contributions

    If you meet the relevant work tests and earn less than $52,697, it is also worth considering if you can take advantage of the Government super co-contribution.

    SMSF fund expenses

    For members in the accumulation phase, it is important that any expenses are actually incurred or paid before 30 June to be deductible in the current financial year.

    Rebalancing accounts between spouses

    The end of financial year is also the perfect opportunity to rebalance pension accounts between spouses, to ensure that super balances are as even as possible and the $1.6 million transfer balance cap is maximised for each member.

    Transfer Balance Account Reporting (TBAR)

    Funds that were paying a pension during 2018-19 will need to complete and lodge a Transfer Balance Account report with the ATO. The date of when you have to report depends on the size of your superannuation balance.

    How can we help?

    If you have any questions or would like further in ensuring you and your fund are well prepared for the end of the financial year please call Cayle Petritsch or Martin van der Saag on 02 9984 7774. Read more Superannuation articles.

    The federal election is this weekend, 18th May 2019 , both major parties have outlined their superannuation and tax policies. With the federal election only days away many of our clients have been asking what the major political parties’ policies are that may impact their SMSF, individual taxation circumstances or personal investments.

    If you would like more information on a particular policy announcement, please do not hesitate to contact our office .

    Liberal-National Coalition

    Superannuation

    • Australians aged 65 and 66 will be able to make voluntary superannuation contributions without needing to work a minimum amount. Previously, this was only available to individuals below 65.
    • Extending access to the bring-forward arrangements (the ability to make three years of post-tax contributions in a single year) to individuals aged 65 and 66.
    • Increasing the age limit for individuals to receive spouse contributions from 69 to 74.
    • Reducing red-tape for how SMSFs claim tax deductions for earnings on assets supporting superannuation pensions.
    • Delaying the implementation of SuperStream (electronic rollovers for SMSFs and superannuation funds) until March 2021 to allow for greater usability.

    Taxation

    • From 2018-19 taxpayers earning between $48,000 and $90,000 will receive $1,080 as a low and middle income tax offset. Individuals earning below $37,000 will receive a base amount of $255 with the offset increasing at a rate of 7.5 cents per dollar for those earning $37,000-$48,000 to a maximum offset of $1,080.
    • Stage 1 tax cuts: From July 1 2018, increasing the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.
    • Stage 2 tax cuts: From 1 July 2022, increasing the top threshold of the 19 per cent personal income tax bracket from $41,000, to $45,000.
    • Stage 3 tax cuts: From 1 July 2024, reducing the 32.5 per cent marginal tax rate to 30 per cent which applies from $120,000 to $200,000. The 37 per cent tax bracket will be abolished.

    Australian Labor Party

    Superannuation

    • Disallowing refunds of excess franking credits from 1 July 2019 – this would mean SMSF members in pension phase no longer receive refunds for the franking credits they receive for their Australian share investments.
    • Banning new limited recourse borrowing arrangements.
    • Reducing the post-tax contributions cap to $75,000 per year down from $100,000.
    • Ending the ability to make catch-up concessional contributions for unused cap amounts in the previous five years.
    • Ending the ability for individuals to make personal superannuation tax deductible contributions unless less than 10 per cent of their income is from salaries.
    • Lowering the higher income 30per cent super contribution tax threshold from $250,000 to $200,000.

    Taxation

    • Labor supports the stage 1 tax cuts and will match the $1,080 low and middle income tax offset. From 1 July 2018, individuals earning below $37,000, will get a $350 a year tax offset, with this amount increasing for those earning between $37,000- $48,000 to the maximum $1,080 offset.
    • Introduce a 30 per cent tax rate for discretionary trust distributions to people over the age of 18.
    • Will limit negative gearing to newly built housing from January 1 2020. (Existing investments are grandfathered under the current law)
    • Reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent. (Existing investments are grandfathered under the current law)
    • Limit the deductions for the cost of managing tax affairs to $3,000.

    How can we help?

    If you have any questions or would like further clarification in regard to how the above policies may affect you and your fund, please feel free to give Cayle Petritsch or Martin van der Saag a call on 02 9984 7774. Read more Superannuation articles.

    The Commissioner has given notice that it will collect data from cryptocurrency designated service providers, under notice, to identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014/15 to 2019/20 financial years.

    The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership. These obligations may include registration, lodgment, reporting and payment responsibilities.

    Please contact this office if you have any questions in respect of cryptocurrency. Read more Financial Industry articles.

    Martin van der Saag
    Partner
    T: 02 9984 7774
    E: martinv@northadvisory.com.au

    Dividend imputation

    The Australian Labor Party (ALP) has announced an intention in government to change franking credits from a refundable to a non-refundable tax credit from 1 July 2019.

    A “Pensioner Guarantee” would be included in the franking credit change for individuals in receipt of an Australian Government pension or allowance. Also, self-managed superannuation funds with at least one pensioner or allowance recipient before 28 March 2018 will also be exempt from the changes (ALP website).

    Negative gearing

    Under an ALP government, negative gearing will only be allowed on newly constructed residential properties after 1 January 2020 (ALP website).

    All prior investments would be grandfathered, meaning that income losses on an asset class are able to be offset against other assessable income.

    It has been suggested that any negative income amounts would be allowed to be carried forward and offset against a future capital gain on the asset (Ref: MinterEllison, p 5).

    However, investors with many rental properties may be able to “stagger” the gearing levels across currently held assets in the same class. Specifics relating to how the new policy would work with regards to split loans, redraw or credit facilities are to be determined.

    CGT discount

    From 1 January 2020, the ALP has proposed to halve the capital gains tax discount from 50% to 25%. This change in the discount rate will apply for all assets purchased after 1 January 2020 that are held for longer than 12 months (ALP website).

    The media release goes on to say that all purchases made prior to 1 January 2020 will be fully grandfathered. There has been no announcement regarding any consequences this development may have on employee share scheme acquisitions.

    Limit on deductions for managing tax affairs

    The proposal in its current form is a $3,000 limit per taxpayer per year for managing tax affairs. This may include preparing and lodging tax returns and activity statements, and obtaining tax advice from a recognised tax adviser.

    Other areas which have been seen as controversial in the media relate to tax agent charges in large “one-off” events, such as divorce, inheritance or retirement (Ref: CPA In the Black). Also, there has been no further guidance on whether the deductibility of general interest charge on a tax debt will also be limited to $3,000 per year.

    Discretionary trust distributions tax

    A prior announcement made by the ALP in opposition intends to introduce a 30% standard minimum rate of tax to adult beneficiaries for discretionary trusts. There intends to be no change to the trust taxing rules for non-discretionary trusts, such as testamentary trusts or fixed unit trusts (ALP website).

    Extension of budget repair levy

    Following the 2019 Federal Budget, the ALP confirmed that, in government, they will bring back the temporary budget repair levy of 2%. ALP shadow treasurer stated the levy would remain in place until the budget surplus was 1% of gross domestic product, anticipated to be 2023 (AFR story, 3 April).

    The 2% levy would apply to individuals who are above $180,000 in taxable income.

    Australian Investment Guarantee

    The ALP leader confirmed in the 2019 budget reply speech a commitment to the Australian Investment Guarantee (AIG). The AIG will be an immediate write-off of 20% for any new eligible asset costing more than $20,000.

    Further information on eligible assets would be made available later, but are intended to include machinery, plant and equipment, including upgrades. It is announced that investments in buildings (capital works) would be excluded, as well as motor vehicles.

    Superannuation contributions

    The federal opposition has committed to changing certain rules relating to superannuation contributions (ALP website). These include:

    • providing superannuation guarantee payments of 9.5% for paid parental leave, and
    • phasing out the $450 per month minimum income threshold for superannuation guarantee.

    Catch-up concessional contributions

    Labor has announced their intention to repeal the catch-up concessional contributions, introduced in the 2016/17 income year (2018 ALP National Platform, p 15).

    Under the enacted legislation, individuals with a total superannuation balance of less than $500,000 are able to make additional concessional contributions. Eligibility to make additional contributions apply where an individual has not reached their concessional contributions cap in previous years, with effect from 1 July 2018. Unused amounts will be carried forward on a rolling basis for a period of five consecutive years from 1 July 2018.

    Other announcements

    • Maintaining the company tax rate of 25% for businesses with aggregated turnover under $50m, scheduled to commence in the 2021/22 income year.
    • Managed investment trust tax rate to be reduced from 30% to 15% in a “Build to rent” scheme, commencing 1 January 2020.
    • Removal of thin capitalisation calculations for debt deductions, leaving international entities with only the worldwide gearing ratio test to apply.
    • Reducing non-concessional contributions cap from $100,000 to $75,000.
    • Reducing threshold for Div 293 tax from $250,000 to $200,000.
    • Banning new limited recourse borrowing arrangements in self-managed superannuation funds.
    • Reintroducing recently repealed legislation surrounding deductibility for salary and wage earners to make additional deductible superannuation contributions. In the past, only self-employed individuals could make personal deductible superannuation contributions.

    If you have any questions or concerns about how the Australian Labor Party tax policies may impact on you, please do not hesitate to contact us. Read more Financial Industry articles.

    Norman Ruan
    Accountant
    T: 02 9984 7774
    E: normanr@northadvisory.com.au

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    future by contacting us today.

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