We thought we would give a very brief summary of the main announcements affecting our clients flowing from the 2011 Federal Budget.
- Personal Tax Rates have not changed.
- Family Tax Benefit A has been increased for families with children from 16 to 19 years of age. This is a Centrelink adjustment only.
- Family Tax Benefits will not be increased by the inflation (CPI) rate for the next 3 years.
- Minors (under 18) are no longer entitled to the low income tax rebate. This means income over $416 on unearned income is taxed from 1 July 2011.
- The Dependant Spouse Tax Offset related to a non working spouse under 40 years of age with no children has been removed from 1/7/2011.
- There are no deductions permitted against all government assistance payments (e.g. Austudy) effective from 1 July 2011.
- HECS upfront payment discount has been reduced from 20% to 10% from 1/1/2012. Voluntary payments above $500 receive 5% bonus discount instead of 10%.
- Immediate deduction of $5,000 for new motor vehicles used for business purchased from 1 July 2012.
- The Entrepreneurs Tax Offset for small business is being abolished from 1 July 2012.
- FBT on company vehicles is now a flat rate at 20% of car cost, using the statutory formula method. New rate is to be phased in over 4 years except new cars are 20% from budget night.
- Trust Distributions to minors with zero tax was $3,333 due to Low Income Tax Offset. Effective 1/7/2011 this has been removed and the maximum untaxed distribution benefit is now only $416.
- Corporate tax rate of 29% from 1/7/2013 for small business entities.
- Businesses in Building & Construction industry must report contractor payments by ABN from 1/7/2012
- For account based pensions, reduction in the minimum pension payment amounts by only 25% in 2011/12 and will return to normal in 2012/13.
- SMSF levy to rise from $150 to $180 for year ended 30th June 2011.
- New SMSF auditor registration fees from 1/7/2012.
- Excess Contribution once off allowance of $10,000 from 2011/12 year taxed at individual marginal rates.
- Higher superannuation concessional contribution cap of $50,000 for members over age 50 after 1/7/2012, applies only to members with less than $500,000 superannuation balance.
- Employer super payments on pay slips from 1/7/2012.
- Director Penalty regime to incorporate Super Guarantee obligations from 1/7/2011.
