The Federal Budget for 2018/19 was handed down on 8th May, 2018.  As always, these are only announcements at this stage.

Given the current political climate there is no guarantee that they will be passed through parliament in their current form, or even at all.

If you are an individual . . .

• The Medicare levy increase from 2% to 2.5% will NOT proceed.
• The 32.5% tax bracket will be increased from $87,000 to $90,000 from 1 July 2018.
• In 2022/23 the 19% tax bracket will be increased from $37,000 to $41,000 and the existing Low Income Tax Offset will increase from $445 to $645. The 32.5% tax bracket will also increase from $90,000 to $120,000.
• In 2024/25 the 32.5% tax bracket will increase from $120,000 to $200,000, eliminating the $37% tax bracket completely.
• A new non-refundable tax offset, the Low and Middle Income Tax Offset, will be introduced in addition to the existing Low Income Tax Offset. To be introduced from 1 July 2018, the offset will be up to $200 for individuals with taxable income up to $37,000 and $530 for individuals up to $90,000. It will then phase out up to $125,333.
• The concessional tax rates for minors receiving income from a Testamentary Trust will be limited to income from assets transferred from deceased estates, or the proceeds of their disposal, or investment of those assets. This will apply from 1 July 2019 and is aimed at stopping the injection of other assets into a Testamentary Trust.

If you are a business …

• The existing $20,000 immediate write-off for small business will be extended again, now out to 30^th June 2019.
• Wage subsidies of up to $10,000 are available to employers who take on older employees.
• A limit of $10,000 for cash payments to business, aimed at limiting the black economy.
• Tightening of access to the R&D tax concession.
• The ability for high profile individuals to assign their image rights to another entity will cease from 1 July 2019.
• A tax deduction will be denied to business taxpayers where they fail to withhold tax from payments that they are required to do so. This could be employee wages or payments to contractors where they have not provided an ABN. This will apply from 1 July 2019.
• Business in the security, road freight and computer design industries will now have to report to the ATO payments they make to contractors. This will apply from 1 July 2019.

Superannuation ….

• Possible increase in the maximum number of members allowed in a self – managed superannuation fund from 4 to 6 from 1 July 2019.
• Individuals aged between 65 and 74 will not have to meet the work test for to make voluntary contributions to super where their balances are below $300,000 and it is the first year they do not meet the work test.  Applies from 1 July 2019.
• Self-managed superannuation funds with a good history will be subject to audit only every 3 years, instead of the current annual audit. More details are to come to light, but this is scheduled to have effect from 1 July 2019.
• High income individuals with multiple jobs will be able to opt out of superannuation guarantee payments from an employer where it would force them over their concessional cap. This will apply from 1 July 2018.

 

If you have any queries on the Federal Budget 2018-19 and how it will impact you, please contact Patrick Rowan & Associates, Geelong.  Tel: 5221 7655

These materials are intended to be used as a guide only.  They should not be relied upon as a substitute for professional advice regarding actual facts or circumstances.

Patrick Rowan & Associates, its employees and agents do not accept any liability for any injury, loss or damage resulting from any person acting, or refraining to act, in reliance on all or part of these materials.