Corporate residency test to be clarified The Government will make technical amendments to clarify the corporate residency test. The law will be amended to provide that a company that is incorporated offshore will be treated as an Australian tax resident if it has a “significant economic connection to Australia”. This test will be satisfied where […]
Depreciation rules still relevant There were no changes to the capital allowance rules in the 2020–2021 Federal Budget. This means that the depreciation rules as currently legislated will not change. This is not a surprise, given the ability of pretty much all businesses to claim an outright deduction for new asset purchases from 7 October 2020 to […]
Instant asset write-off: minor change Given the largesse of the new outright deduction for capital assets until 30 June 2022, the instant asset write-off rules have become temporarily irrelevant for most taxpayers (those with aggregated annual turnover of less than $5 billion). Accordingly, there were no changes to the rules, other than a slight tweaking for costs […]
Loss carry-back from 2019–2020, 2020–2021 and 2021–2022 The Government will allow eligible companies to carry back tax losses from the 2019–2020, 2020–2021 or 2021–2022 income years to offset previously taxed profits in 2018–2019 or later income years. Corporate tax entities with an aggregated turnover of less than $5 billion will be able to apply tax losses […]
Outright capital assets deduction until 30 June 2022 for most businesses Businesses with aggregated annual turnover of less than $5 billion will be enable to deduct the full cost of eligible capital assets acquired from 7:30pm AEDT on 6 October 2020 (Budget night) and first used or installed by 30 June 2022. Full expensing in the year of first use will […]
Small business tax concessions extended to medium businesses The Budget confirmed the Government’s announcement on 2 October 2020 that a range of tax concessions currently available to small businesses (aggregated annual turnover under $10 million) will be made available to medium sized businesses (aggregated annual turnover of $10 million or more but less than $50 million). The extension of these […]
First Home Loan Deposit Scheme: additional 10,000 places The Government will allocate an additional 10,000 places for first home buyers under the existing First Home Loan Deposit Scheme. Under the existing Scheme, eligible first home buyers can obtain a loan to build a new home or purchase a newly built home with a deposit of as […]
CGT exemption for “granny flats” The Budget confirms that the Government will put in place a “targeted” CGT exemption for granny flat arrangements. Under the measure, CGT will not apply to the creation, variation or termination of a granny flat arrangement providing accommodation where there is a formal written agreement in place. The Budget states […]
Low income offsets: new LITO brought forward and LMITO retained The Government announced in the Budget that the new low income tax offset (LITO) will be brought forward to start as from the 2020–2021 income year. The new LITO was intended to replace the existing low income and low and middle income tax offsets as […]
Personal tax cuts brought forward to 1 July 2020 In the Budget, the Government announced that it will bring forward to 1 July 2020 the personal tax cuts (Stage 2) that were previously legislated in 2018 to commence from 1 July 2022. The Stage 3 tax changes remain unchanged and commence from 1 July 2024, as previously legislated: Stage 2 tax rates – […]
Super contributions work test exemption extended; spouse contributions age limit increased The Budget confirmed the Treasurer’s announcement on 1 April 2019 that individuals aged 65 and 66 will be able to make voluntary superannuation contributions from 1 July 2020 (both concessional and non-concessional) without needing to meet the contributions work test. The age limit for […]
Tax integrity focus on larger businesses’ unpaid tax and super The Government will provide ATO funding of $42.1 million over four years to to increase activities to recover unpaid tax and superannuation liabilities. These activities will focus on larger businesses and high wealth individuals to ensure on-time payment of their tax and superannuation liabilities. However, […]
Instant asset write-off extended to more taxpayers; threshold increased The Budget contains important changes to the instant asset write-off rules. These changes are in addition to the measures contained in a Bill currently before Parliament. There are two key changes. First, the write-off has been extended to medium sized businesses, where it previously only applied […]
Personal tax cuts: low–mid tax offset increase now; more rate changes from 2022 In the 2019–2020 Federal Budget, the Coalition Government announced its intention to provide further reductions in tax through the non-refundable low and middle income tax offset (LMITO). Under the changes, the maximum reduction in an eligible individual’s tax from the LMITO will […]