The Federal Treasurer Mr Josh Frydenberg handed down the 2019-20 Federal Budget at 7.30pm on April 2 2019.

The Budget focuses on “restoring the nation’s finances”, further strengthening the economy to create more jobs and to “guarantee the essential services”.

The government proposes various changes to further lower individual taxes, including increasing the low and middle-income tax offset, and lowering the 32.5 per cent rate to 30 per cent in 2024-25. More businesses will have access to immediate deductions for asset purchases, with the expansion of the instant asset write-off to businesses with an annual turnover of less than $50 million.

The full Budget papers are available at www.budget.gov.au and the Treasury minister’s media releases are available at www.ministers.treasury.gov.au

Here’s a summary of the tax and superannuation changes that may impact you.

Income tax

  • The legislated Personal Income Tax Plan will be changed to further lower taxes for individuals, including changes to the low and middle-income tax offset (LMITO), the low-income tax offset (LITO) and the personal income tax (PIT) rates and thresholds.
  • The instant asset write-off threshold for businesses with an aggregated turnover of less than $10 million will be increased to $30,000 for eligible assets that are first used, or installed ready for use, from 7.30pm on April 2 2019 to June 30 2020.
  • Businesses with an aggregated turnover of $10 million or more but less than $50 million will be able to immediately deduct purchases of eligible assets costing less than $30,000 that are first used, or installed ready for use, from 7.30pm on April 2 2019 to June 30 2019.
  • The Medicare levy low-income thresholds for singles, families, seniors and pensioners will be increased from the 2018-19 income year.
  • An income tax exemption will be provided for qualifying grants made to primary producers, small businesses and non-profits affected by the North Queensland floods.

Tax integrity and black economy

  • Australian Business Number (ABN) holders will be required to lodge their income tax return and confirm the accuracy of their details on the Australian Business Register annually to retain their ABN status.
  • The ATO will receive funding to increase activities to recover unpaid tax and superannuation liabilities with a focus on large businesses and high wealth individuals.

Superannuation

  • Members of regulated superannuation funds will not have to meet the work test after July 1 2020 if they are 65 or 66 years of age.
  • The restrictions on claiming the spouse contribution tax offset will be eased from July 1 2020, giving 70 to 74-year-old spouses eligibility.
  • The calculation of exempt current pension income will be simplified for superannuation funds from July 1 2020, allowing a preferred method of calculation and removal of some actuarial certificates.
  • Transitional tax relief for merging superannuation funds will become permanent from July 1 2020.

If you have any questions regarding these changes, please contact our team.

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