Business

•    Company tax loss carry-back scheme which allows companies to carry-back tax losses of up to $1 million to offset previous profits and provide a refund of tax previously paid.

•    Immediate write-off of the first $5,000 of a new or used motor vehicle and each eligible business asset that costs less than $6,500 for small business entities with a turnover of less than $2 million a year, in place of the entrepreneur’s tax offset.

•    Building and construction industry shakeup which requires operators in these sectors to report annually on contractor payments.

•    More GST credit claims available as the financial acquisitions threshold increases from $50,000 to $150,000.

•    Fuel tax rise from 23.1c to 25.5c per litre that applies to registered heavy vehicles with a gross mass of between 4.5 tonne and 20 tonne, are designed for transporting passengers or goods and are undertaking an ‘eligible trip’ on a public road.

Superannuation

•    2012-13 concessional contributions cap changes from $50,000 to $25,000 for individuals aged 50 and over to align with the contributions cap of everyone else. The government has deferred the higher concessional contributions cap of $50,000 for individuals aged 50 and over with superannuation balances of less than $500,000 from July 1, 2012 to July 1, 2014.

•   Increase in tax within the super fund for high-income earners from 15% to 30% on concessional contributions which are deductible to the individual. This measure applies to individuals with an assessable income of more than $300,000 a year.

•    One-off escape clause for excess contributions that gives individuals the option to have excess concessional contributions of up to $10,000 refunded and assessed at their marginal tax rate.

•   Co-contribution changes where the maximum co-contribution has been reduced from $1,000 to $500 and the income threshold at which a co-contribution is not available has decreased from $61,920 to $46,920.

•    Low-income superannuation contribution rebate of the 15% tax paid for $500 worth of contributions for people earning up to $37,000.

•    Transitional employment termination payments rules that allow them to be paid directly into superannuation are to end.

Individuals and Families

• Tax rates change as the tax-free threshold rises from $6,000 to $18,200. The marginal rate is 19% for individuals earning up to $37,000, then 32.5% up to $80,000, 37% for up to $180,000 and 45% beyond that. The low-income offset reduces from $1,500 to $445 for individuals earning up to $66,666.
• Private health insurance rebate will be means tested and individuals are not entitled to their existing rebate rate if their single income is $84,001 or more, or if their family income is $168,001 or more.
• The following offsets have been consolidated: the invalid spouse, carer spouse, housekeeper, housekeeper (with child), child-housekeeper, child housekeeper (with child), invalid relative and parent/parent-in-law tax offsets. The new offset is based on the highest rate of the existing offset it replaces.
• Indexation of the Baby Bonus has been paused for three years and from September 1, 2012, the bonus will be cut from $5,437 to $5,000.
• SchoolKids Bonus replaces the Education Tax Refund. Families who qualify for Family Tax Benefit A will receive a cash hand-out of $820 for every high-school child and $410 for every primary school child – with effect from January 1, 2013.
• Mature age worker tax offset will be phased out by only allowing individuals born before July 1, 1957 to access this offset.
• Employment termination payment (ETP) tax offset means tested so only the part of an ETP that takes a person’s total annual taxable income to no more than $180,000 receives the tax offset.
• Non-resident taxpayer rate changes where the first two marginal tax rate thresholds for non-residents merge into a single threshold with a marginal tax rate of 32.5%, applying to all taxable income below $80,000.
• Age Pension recipients who are overseas for more than 26 weeks are paid their maximum pension entitlement only if their Australian Working Life Residence (AWLR) is 35 years or more.

Consult our office to find out more about these changes.