Tweet
The lunatics have well & truly taken over:
Highlights
2012/13 Federal Budget Highlights
Individuals and families
Standard work-related expenses deduction will not proceed
50% discount for interest income
Medical expenses tax offset tightened
Dependency tax offsets consolidated
Mature age worker tax offset to be phased out
Medicare low income thresholds
Exemptions from flood and cyclone levies
Schoolkids Bonus to replace education expenses tax offset
Seasonal Labour Mobility Program improved tax treatment
Companies and finance
Company tax cut will not proceed
Tax breaks for buildings
Limited recourse debt amended definition
Company tax loss carry-back measures
Airline transport fringe benefits reform
Further limitations on LAFHA
Tier 2 capital instruments treatment under Basel III reforms
No deduction for related-party bad debts written off
Clean Energy Finance Corporation will be tax exempt
CGT
CGT: amendments to beneficial interests
CGT: revenue asset and trading stock roll-overs for interposing a company
CGT: scrip-for-scrip roll-over integrity provisions
CGT and loss relief to super reforms
CGT: exemptions for compensation payments and insurance policies
CGT: natural disasters relief
CGT: deceased estates
International
Non-resident taxpayers: rate changes
CGT discount for non-residents abolished
Managed investment trusts
Superannuation
Deferral of higher concessional contributions cap
Concession for superannuation contributions reduced for high income earners
Employment termination payment tax offset
GST
Two-year extension of compliance program
Cross-border transactions
Sale of property by mortgagee
Reduced ITCs for credit unions
GST-free health supplies
Treatment of appropriations
Other measures
Tax Reform Road Map
Project Wickenby additional funding
Additional funding to manage tax debts
Wine producer rebate integrity measure
CCH News
BUDGET POLL: What do you think?
Special Offer: The Tax Solution Finder
Customer Story: Asciano streamlines tax compliance with CCH Tax Integrator
How Tax Navigator works for you
The CCH Tax Team
Highlights
2012/13 Federal Budget Highlights
Written by the CCH Tax Team
The Federal Budget for 2012/13 was handed down by the Treasurer, Mr Wayne Swan, at 7:30 pm (AEST) on 8 May 2012. The Budget was a fiscally tight one, designed to return the Budget to surplus. It contained anticipated tax changes, such as superannuation changes and the abolition of previously announced measures, such as the company tax rate cut and the Tax Breaks for Green Buildings. However, it also contained a raft of other tax measures, including significant changes to the tax loss measures and the decision not to proceed with the standard tax deduction and the interest discount.
Here are the tax and superannuation highlights.
Individuals and families
The government will not proceed with the standard deduction for work-related expenses.
The 50% tax discount for interest income will not proceed.
A means test will be introduced for the net medical expenses tax offset from 1 July 2012.
From 1 July 2012, the eight dependency tax offsets will be consolidated into a single, streamlined and non-refundable offset.
From 1 July 2012, the mature age worker tax offset (MAWTO) will be phased out for taxpayers born on or after 1 July 1957.
The Medicare levy low income thresholds will be increased to $19,404 for individuals and $32,743 for families for the 2011/12 income year.
Exemptions for the temporary flood and cyclone reconstruction levy will be extended to individuals who were eligible for an Australian Government Disaster Recovery Payment in 2010/11 as well as certain individuals affected by a natural disaster in 2011/12.
The education expenses tax offset will be replaced with a new Schoolkids Bonus from 1 January 2013.
From 1 July 2012, the marginal tax rate for non-resident individuals participating in the Seasonal Labour Mobility Program will be reduced to 15%.
Companies and finance
The proposed measure to lower the company tax rate from 2013/14 and from 2012/13 for small businesses will not proceed.
The Tax Breaks for Green Buildings program will not proceed.
From 8 May 2012, limited recourse debt will include arrangements where the creditors right to recover the debt is effectively limited to the financed asset or security provided.
Companies will be allowed to carry back up to $1m of tax losses in 2012/13 to offset against tax paid in 2011/12. From 2013/14, tax losses can be carried back and offset against tax paid up to two years earlier.
The taxable value of airline transport fringe benefits will be updated from the stand-by value to the market value for benefits provided after 7:30pm (AEST) on 8 May 2012.
The tax concession for LAFHA and benefits will be limited to employees living away from a home maintained in Australia and will only be available for a maximum period of 12 months in respect of an individual for any particular work location.
Certain Tier 2 capital instruments issued by ADIs can be treated as debt for income tax purposes on commencement of the Basel III capital reforms on 1 January 2013.
The write off of bad debts owing from related parties will not be deductible effective from 7:30pm (AEST) 8 May 2012.
The Clean Energy Finance Corporation will be exempt from income tax effective from 1 July 2013.
CGT
Changes will be made to the application of the scrip-for-scrip roll-over and small business concessions to trusts, super funds and life insurance companies.
The revenue asset and trading stock roll-overs that apply to the exchange of interests in a company or unit trust for shares in another company will be broadened.
The CGT scrip-for-scrip roll-over integrity provisions will be strengthened.
CGT: temporary loss relief will be made available to facilitate super reforms.
Minor extensions to the CGT exemptions for certain compensation payments and insurance policies will be made.
Minor amendments to natural disasters CGT relief will be made.
CGT: refinements to income tax law for deceased estates will be made.
International
The personal income tax rates and thresholds that apply to non-residents Australian income will be adjusted.
The CGT discount for non-residents will be abolished for gains accrued after 7:30pm (AEST) on 8 May 2012.
The managed investment trust final withholding tax rate will be increased from 7.5% to 15% from 1 July 2012.
Superannuation
The start date of the 2010/11 Budget measure increasing concessional contribution caps for individuals over 50 with low superannuation balances will be deferred by two years, from 1 July 2012 to 1 July 2014.
From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions reduced from 30% to 15% (excluding the Medicare levy).
From 1 July 2012, the employment termination payment (ETP) tax offset will be limited so that only that part of an affected ETP, such as a golden handshake, that takes a persons total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset.
GST
Funding for additional GST compliance activities will be extended for a further two years until 2015/16.
Minor changes affecting cross border transactions will include a clarification of the definition of permanent establishment for GST purposes.
The operation of the GST law in relation to the mortgage lending sector will be clarified to reduce compliance costs.
From 1 July 2011, access to reduced input tax credits (RITC) will be restored for credit unions who rebrand as banks.
Health supplies by a health care provider paid for by a statutory compensation scheme operator will be GST-free if the underlying supply from the health care provider to the individual is also GST-free.
From 1 July 2012, a regulation-making power will allow certain payments between government-related entities to be prescribed as not being subject to GST.
Other measures
The government has provided a tax reform road map.
There will be additional funding of $76.8m for the Tax Office and other Project Wickenby agencies.
Additional funding will be provided for the Tax Office to manage tax debt.
From 1 July 2012, the wine producer rebate will be amended to ensure that wine producers will not be able to claim multiple rebates for the same quantity of wine, beyond the total amount of wine equalisation tax payable.
Highlights
2012/13 Federal Budget Highlights
Individuals and families
Standard work-related expenses deduction will not proceed
50% discount for interest income
Medical expenses tax offset tightened
Dependency tax offsets consolidated
Mature age worker tax offset to be phased out
Medicare low income thresholds
Exemptions from flood and cyclone levies
Schoolkids Bonus to replace education expenses tax offset
Seasonal Labour Mobility Program improved tax treatment
Companies and finance
Company tax cut will not proceed
Tax breaks for buildings
Limited recourse debt amended definition
Company tax loss carry-back measures
Airline transport fringe benefits reform
Further limitations on LAFHA
Tier 2 capital instruments treatment under Basel III reforms
No deduction for related-party bad debts written off
Clean Energy Finance Corporation will be tax exempt
CGT
CGT: amendments to beneficial interests
CGT: revenue asset and trading stock roll-overs for interposing a company
CGT: scrip-for-scrip roll-over integrity provisions
CGT and loss relief to super reforms
CGT: exemptions for compensation payments and insurance policies
CGT: natural disasters relief
CGT: deceased estates
International
Non-resident taxpayers: rate changes
CGT discount for non-residents abolished
Managed investment trusts
Superannuation
Deferral of higher concessional contributions cap
Concession for superannuation contributions reduced for high income earners
Employment termination payment tax offset
GST
Two-year extension of compliance program
Cross-border transactions
Sale of property by mortgagee
Reduced ITCs for credit unions
GST-free health supplies
Treatment of appropriations
Other measures
Tax Reform Road Map
Project Wickenby additional funding
Additional funding to manage tax debts
Wine producer rebate integrity measure
CCH News
BUDGET POLL: What do you think?
Special Offer: The Tax Solution Finder
Customer Story: Asciano streamlines tax compliance with CCH Tax Integrator
How Tax Navigator works for you
The CCH Tax Team
Highlights
2012/13 Federal Budget Highlights
Written by the CCH Tax Team
The Federal Budget for 2012/13 was handed down by the Treasurer, Mr Wayne Swan, at 7:30 pm (AEST) on 8 May 2012. The Budget was a fiscally tight one, designed to return the Budget to surplus. It contained anticipated tax changes, such as superannuation changes and the abolition of previously announced measures, such as the company tax rate cut and the Tax Breaks for Green Buildings. However, it also contained a raft of other tax measures, including significant changes to the tax loss measures and the decision not to proceed with the standard tax deduction and the interest discount.
Here are the tax and superannuation highlights.
Individuals and families
The government will not proceed with the standard deduction for work-related expenses.
The 50% tax discount for interest income will not proceed.
A means test will be introduced for the net medical expenses tax offset from 1 July 2012.
From 1 July 2012, the eight dependency tax offsets will be consolidated into a single, streamlined and non-refundable offset.
From 1 July 2012, the mature age worker tax offset (MAWTO) will be phased out for taxpayers born on or after 1 July 1957.
The Medicare levy low income thresholds will be increased to $19,404 for individuals and $32,743 for families for the 2011/12 income year.
Exemptions for the temporary flood and cyclone reconstruction levy will be extended to individuals who were eligible for an Australian Government Disaster Recovery Payment in 2010/11 as well as certain individuals affected by a natural disaster in 2011/12.
The education expenses tax offset will be replaced with a new Schoolkids Bonus from 1 January 2013.
From 1 July 2012, the marginal tax rate for non-resident individuals participating in the Seasonal Labour Mobility Program will be reduced to 15%.
Companies and finance
The proposed measure to lower the company tax rate from 2013/14 and from 2012/13 for small businesses will not proceed.
The Tax Breaks for Green Buildings program will not proceed.
From 8 May 2012, limited recourse debt will include arrangements where the creditors right to recover the debt is effectively limited to the financed asset or security provided.
Companies will be allowed to carry back up to $1m of tax losses in 2012/13 to offset against tax paid in 2011/12. From 2013/14, tax losses can be carried back and offset against tax paid up to two years earlier.
The taxable value of airline transport fringe benefits will be updated from the stand-by value to the market value for benefits provided after 7:30pm (AEST) on 8 May 2012.
The tax concession for LAFHA and benefits will be limited to employees living away from a home maintained in Australia and will only be available for a maximum period of 12 months in respect of an individual for any particular work location.
Certain Tier 2 capital instruments issued by ADIs can be treated as debt for income tax purposes on commencement of the Basel III capital reforms on 1 January 2013.
The write off of bad debts owing from related parties will not be deductible effective from 7:30pm (AEST) 8 May 2012.
The Clean Energy Finance Corporation will be exempt from income tax effective from 1 July 2013.
CGT
Changes will be made to the application of the scrip-for-scrip roll-over and small business concessions to trusts, super funds and life insurance companies.
The revenue asset and trading stock roll-overs that apply to the exchange of interests in a company or unit trust for shares in another company will be broadened.
The CGT scrip-for-scrip roll-over integrity provisions will be strengthened.
CGT: temporary loss relief will be made available to facilitate super reforms.
Minor extensions to the CGT exemptions for certain compensation payments and insurance policies will be made.
Minor amendments to natural disasters CGT relief will be made.
CGT: refinements to income tax law for deceased estates will be made.
International
The personal income tax rates and thresholds that apply to non-residents Australian income will be adjusted.
The CGT discount for non-residents will be abolished for gains accrued after 7:30pm (AEST) on 8 May 2012.
The managed investment trust final withholding tax rate will be increased from 7.5% to 15% from 1 July 2012.
Superannuation
The start date of the 2010/11 Budget measure increasing concessional contribution caps for individuals over 50 with low superannuation balances will be deferred by two years, from 1 July 2012 to 1 July 2014.
From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions reduced from 30% to 15% (excluding the Medicare levy).
From 1 July 2012, the employment termination payment (ETP) tax offset will be limited so that only that part of an affected ETP, such as a golden handshake, that takes a persons total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset.
GST
Funding for additional GST compliance activities will be extended for a further two years until 2015/16.
Minor changes affecting cross border transactions will include a clarification of the definition of permanent establishment for GST purposes.
The operation of the GST law in relation to the mortgage lending sector will be clarified to reduce compliance costs.
From 1 July 2011, access to reduced input tax credits (RITC) will be restored for credit unions who rebrand as banks.
Health supplies by a health care provider paid for by a statutory compensation scheme operator will be GST-free if the underlying supply from the health care provider to the individual is also GST-free.
From 1 July 2012, a regulation-making power will allow certain payments between government-related entities to be prescribed as not being subject to GST.
Other measures
The government has provided a tax reform road map.
There will be additional funding of $76.8m for the Tax Office and other Project Wickenby agencies.
Additional funding will be provided for the Tax Office to manage tax debt.
From 1 July 2012, the wine producer rebate will be amended to ensure that wine producers will not be able to claim multiple rebates for the same quantity of wine, beyond the total amount of wine equalisation tax payable.
Comment