June 2018
2018 Budget Update:
We have highlighted some of the important proposals from the 2018/19 Federal Budget including:
- The introduction of the 'Low and Middle Income Tax Offset' , a temporary nonrefundable tax offset of up to $530 p.a. to Australian resident low and middle income taxpayers for the 2019 to 2022 income years. This offset will apply in addition to the Low Income Tax Offset .
- Providing tax relief for individual taxpayers by progressively increasing some of the tax brackets (including an increase in the top threshold of the 32.5% personal income tax bracket from $87,000 to $90,000 from 1 July 2018), and eventually removing the 37% tax bracket entirely.
- The $20,000 immediate write-off for small business will be extended by a further 12 months to 30 June 2019 (i.e., for businesses with aggregated annual turnover less than $10 million).
- From 1 July 2019:
- Increasing the maximum number of allowable members in an SMSF from four to six members ;
- Ensuring that unpaid present entitlements (or 'UPEs') come within the scope of Division 7A ; and
- Denying deductions for expenses associated with holding vacant residential or commercial land.
The Government has introduced legislation to complement the superannuation guarantee ('SG') integrity package already before Parliament by introducing a one-off, twelve month amnesty for historical underpayment of SG.
The Bill incentivises employers to come forward and "do the right thing by their employees" by paying any unpaid superannuation in full, as well as the high rate of nominal interest (but without the penalties for late payment that are normally paid to the Government by such employers).
Employers that do not take advantage of the amnesty will face higher penalties when they are subsequently caught – in general, a minimum 50% on top of the SG Charge they owe.
In addition, throughout the amnesty period the ATO will still continue its usual enforcement activity against employers for those historical obligations they don't own up to voluntarily. The amnesty will run for twelve months from 24 May 2018.
Other updates this month include :
- ATO scrutinising car claims this tax time
- SMSFs and "The First Home Super Saver Scheme" and "The Downsizing Measure"
- Depreciation car limit for 2018/19 is $57,581 (unchanged from 2017/18)
- FBT: Car parking threshold increased from $8.66 in 2018 FBT year to $8.83 in 2019 FBT year commencing 1 April 2018
If you have any questions, please do not hesitate to contact us .
