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2013 Financial Year New tax change  

By Ming  Li  

Brand new  tax  brackets  –   including  carbon  tax  assistance   Rates  for  2011-­‐12  apply  from  1  July  2011

Table 1:  Tax  rates  for  2012-­‐13  and  2013-­‐14  

Table 2:  Tax  rates  for  2015-­‐16  

•  The maximum  value  of  the  low-­‐income  tax  offset   reduces  from  $1,500  to  $445,  and  aBer  that,  will  be   reduced  by  1.5  cents  in  every  dollar  over  $37,000.   Previously,  that  number  was  at  $30,000.  That  means   you’ll  be  able  to  earn  up  to  $20,542  before  any  tax  is   payable  at  all.   •  From  2015,  the  low-­‐income  tax  offset  will  be  reduced   to  just  $300.   •  The  pensioner  tax  offset  will  merge  with  the  new   senior  Australians  tax  offset.  

Non Resident  非税务居民   Rates  for  2011-­‐12  apply  from  1  July  2011

Non Resident  非税务居民   Rates  from  1  July  2012

Non Resident  非税务居民   Rates  apply  from  1  July  2015

Changes to  the  private  health   rebate •  The  government  will  start  tesNng  the  private   health  insurance  rebate  and  the  Medicare  levy   surcharge  against  income,  in  three  different   thresholds.  High  income  earners  will  receive   less  of  the  private  health  insurance  rebate,   and  the  surcharge  may  increase.   •  The  thresholds  are  a  bit  complex,  but  here’s   the  table  straight  from  the  ATO.    

Replacing the  EducaNon  Tax   Refund  with  a  School  kids  Bonus   •  The  School  kids  Bonus  will  be  made  in  two  equal   installments  in  January  and  July  each  year  commencing   January  2013.   •   Every  family  with  a  child  at  school  will  be  guaranteed  $410   per  annum  for  each  primary  school  student  and  $820  per   annum  for  each  secondary  school  student.     •  All  eligible  families  (receive  of  family  tax  benefit  part  A)  will   receive  the  full  rate  of  payment  and  will  no  longer  need  to   keep  receipts  as  proof  of  expense,  or  wait  unNl  tax  Nme.  

ConsolidaNng the  dependency   offsets  into  one   •  The  Government  will  consolidate  eight  dependency   tax  offsets  into  a  single  streamlined  and  non-­‐ refundable  offset  that  is  only  available  to  taxpayers   who  maintain  a  dependant  who  is  genuinely   unable  to  work  due  to  carer  obligaNon  or  disability.  

•  The offsets  to  be  consolidated  are  the:   –  invalid  spouse;   –  carer  spouse;   –  housekeeper;   –  housekeeper  (with  child);   –  child-­‐housekeeper;   –  child-­‐housekeeper  (with  child);   –  invalid  relaNve;  and   –  parent/parent-­‐in-­‐law  tax  offsets.  

•  This measure  will  take  effect  from  1  July  2012.  

Mature age  worker  tax  offset  to  be   phased  out   •  The  Government  will  phase  out  the  mature  age   worker  tax  offset  from  1  July  2012   •  for  taxpayers  born  on  or  aBer  1  July  1957  (i.e.   aged  under  55  years).  

Means tesNng  the  net  medical   expenses  tax  offset   •  The  Government  will  introduce  a  means  test   for  the  net  medical  expenses  tax  offset   •  (NMETO)  as  follows.  

•  Adjusted taxable  income  Claim  threshold  Tax  offset   Above  Medicare  levy  surcharge  threshold   In  the  2012-­‐13  income  year  that  is:   $84,000  for  singles;  and   $168,000  for  couples  or  families   $5,000  10%  of  eligible  expenses  incurred   Below  Medicare  levy  surcharge  threshold  $2,060  20%  of  eligible  expenses   incurred  

•  This measure  will  take  effect  from  1  July  2012.  

Family payments •  Changes  to  Family  Tax  Benefit  Part  A   The  Government  will  make  the  following  changes  to   Family  Tax  Benefit  (FTB)  Part  A:   limiNng  the  age  of  eligibility;  and   increasing  the  rate.  

•  This measure  will  take  effect  from  1  July  2013.  

Company loss  carry-­‐back                    The  Government  will  provide  tax  relief  for   companies  by  allowing  them  to  carry-­‐back  tax   losses  so  they  receive  a  refund  against  tax   previously  paid.  

•  Income year  Loss  carry-­‐back   2012-­‐13  One-­‐year  carry  back  (i.e.  tax  losses  incurred   in  2012-­‐13  can  be  carried  back  and  offset  against   tax  paid  in  2011-­‐12)   2013-­‐14  and  later  years  Two-­‐year  carry  back  (i.e.  tax   losses  can  be  carried  back  and  offset  against  tax   paid  up  to  two  years  earlier)  

Companies will  be  able  to  carry  back  up  to  $1  million  of   losses  each  year.  This  will  provide  cash  benefit  of  up  to   $300,000  a  year.   The  loss  carry-­‐back  will  be  available  to  companies  and   enNNes  that  are  taxed  like  companies.  It  will  apply  to  their   revenue  losses  only  and  will  be  subject  to  integrity  rules,   and  limited  to  a  company’s  franking  account  balance.  

Removal of  the  CGT  discount  for   non-­‐residents   •  The  Government  will  remove  the  50  per  cent   CGT  discount  for  non-­‐residents  on  capital   gains  accrued  aBer  7.30  pm  (AEST)  on  8  May   2012.  The  CGT  discount  will  remain  available   for  capital  gains  accrued  prior  to  this  Nme   where  non-­‐residents  choose  to  obtain  a   market  valuaNon  of  assets  as  at  8  May  2012.  

Higher tax  concession  for  high   income  earners  reduced   •  Individuals  with  income  greater  than  $300,000   will  have  the  tax  concession  on  their   contribuNons  reduced  from  30  per  cent  to  15   per  cent  (excluding  the  Medicare  levy).  This   measure  will  take  effect  from  1  July  2012.  

Deferral of  higher  concessional   contribuSons  cap   •  The  Government  will  defer  increasing  concessional   contribuNon  caps  for  individuals  aged  50  and  over   with  low  superannuaNon  balances  by  two  years,   from  1  July  2012  to  1  July  2014.   •   Under  the  higher  concessional  contribuNons  cap   measure,  individuals  aged  50  and  over  with   superannuaNon  balances  below  $500,000  will  be   able  to  make  up  to  $25,000  more  in  concessional   contribuNons  than  allowed  under  the  general   concessional  contribuNons  cap.  

Abolishing the  maximum   superannuaNon  guarantee  age  limit   •  The  Government  will  remove  the  superannuaNon   guarantee  (SG)  maximum  age  limit,  with  effect  from   1  July  2013.  This  will  make  it  compulsory  for   employers  to  provide  SG  contribuNons  for   employees  aged  75  or  older.  

Further reform  of  living-­‐away-­‐ from-­‐home  allowances        The  Government  will  further  reform  the  tax   concession  for  LAFHAs.   –  LimiNng  access  to  the  tax  concession  to   employees  who  maintain  a  home  for  their  own   use  in  Australia,  that  they  are  living  away  from  for   work;  and   –  providing  the  tax  concession  for  a  maximum   period  of  12  months  in  respect  of  an  individual   employee  for  any  parNcular  work  locaNon.  

Instant asset  write-­‐off   •  From  July  this  year,  any  SME  with  under  $2   million  in  turnover  will  be  able  to  write  off  any   asset  worth  less  than  $6,500  immediately.  The   entrepreneurs’  tax  offset  would  be  scrapped   in  order  to  help  fund  the  $5,000  deducNon  for   any  vehicle  purchase  from  1st  July  2012.  

2010-­‐11 BUDGET  MEASURES  THAT   WILL  NOT  PROCEED   •  The  Government  will  not  proceed  with  the   following  2010-­‐11  Budget  measures:   –  reducing  the  company  tax  rate,  from  the  2013-­‐14   income  year  and  implemenNng  an  early  start  to   the  company  tax  rate  cut  for  small  businesses   from  the  2012-­‐13  income  year;   –  providing  a  50  percent  tax  discount  for  interest   income  (was  due  to  commence  on  1  July  2013);  

–  providing a  standard  deducNon  for  work-­‐related   expenses  and  the  cost  of  managing  tax  affairs   (was  due  to  commence  on  1  July  2013);  and   –  providing  a  tax  break  for  eligible  businesses  that   invest  in  improving  the  energy  efficiency  of  their   exisNng  building  (was  due  to  commence  1  July   2012).  

Ming Li  

14th July, 2012

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