News

Tax changes under the new Government

The new Federal Government has identified 92 announced but still unlegislated and unresolved tax and superannuation changes.

Of these, the Government stated it will proceed with 18 initiatives. A further three initiatives will be significantly amended, while it will not proceed with seven initiatives.  The remaining 64 announced changes will be considered and, if required, the Government intends that the bulk of any legislation that is to be progressed should be passed by Parliament by 1 July 2014.

 Specifically, the Government will NOT proceed with the following three measures which directly affect individual and business taxpayers:

1).           Self-Education Expenses Cap - the proposed $2,000.00 cap on the amount people would be able to deduct as self-education expenses, including training and educational courses, textbooks and other accreditation expenses.

2).           Removal of the FBT Statutory Formula method for car fringe benefits

3).           Tax on Superannuation Pensions- proposed new tax on earnings on superannuation assets, which would have taxed superannuation funds with income greater than $100,000 in the draw-down pension phase.

The un-enacted measures the Government WILL proceed with include:

  • Net Medical Expenses Tax Offset being phased out - the phasing out will allow current claimants to remain eligible for the offset until 2014/15.  Note, if you don't claim the NMETO in 2012/13, you wont be entitled to claim it in 2013/14 or 2014/15.

  • Increase FMD threshold - increasing the non-primary production income eligibility threshold for Farm Management Deposits from $65,000 to $100,000.

  • Dividend Washing - preventing "dividend washing" whereby sophisticated investors can "double dip" on franking credits.