The Budget does not contain major tax changes. It does seek to begin some “Budget repair work” via tax integrity measures particularly in international tax matters and in relation to debt funding by foreign controlled entities. However, here’s what we think you need to know:
- COVID grants treated as NANE – the Budget Papers contain a listing of further State and Territory COVID-19 grant programs eligible for non-assessable, non-exempt treatment.
- In the Budget, the Government did not announce any personal tax rates changes. The Stage 3 tax changes commence from 1 July 2024, as previously legislated. Find out more on a previous article here
- The 2022-23 October Budget did not announce any extension of the low and middle income tax offset (LMITO) to the 2022-23 income year. The LMITO has now ceased and been fully replaced by the low income tax offset (LITO). The March 2022-23 Budget had increased the LMITO by $420 for the 2021-22 income year so that eligible individuals (with taxable incomes below $126,000) received a maximum LMITO up to $1,500 for 2021-22 (instead of $1,080)
- SMSF residency changes delayed – the proposal to extend the central management and control test safe harbour from 2 to 5 years, and remove the active member test, will now start from the income year commencing on or after assent to the enabling legislation (previously 1 July 2022).
- SMSF audits every 3 years – the Government will not proceed with the former government’s proposal to allow a 3-yearly audit cycle for SMSFs with a good compliance history.
- Standardised disclosure for retirement income products – the Government will not proceed with the proposal to report standardised metrics in product disclosure statements.
- Reducing downsizer contribution age to 55 – the Government has confirmed that the minimum eligibility age for making superannuation downsizer contributions will be lowered to age 55 (from age 60).
Give the TSP a call on 49 264155 or email firstname.lastname@example.org