Tax-related measures announced included:
▪ Personal tax rates – no changes were made to personal tax rates. The Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25 as already legislated.
▪ LMITO retained for 2021-22 – provides a reduction in tax of up to $1,080. Not a tax cut, the avoidance of an increase.
▪ Temporary full expensing extended – the Government will extend the 2020-21 temporary full expensing measures for 12 months until 30 June 2023 – businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.
▪ Loss carry-back extended – the loss years in respect of which an eligible company (aggregated annual turnover of up to $5 billion) can currently carry back a tax loss (2019-20, 2020-21 and 2021-22) will be extended to include the 2022-23 income year.
▪ Individual residency test reformed – the Government will replace the existing tests for the tax residency of individuals with a primary “bright line” test under which a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
▪ Employee share schemes – the Government will remove the cessation of employment as a taxing point for the tax-deferred employee share schemes.
▪ ATO debt recovery – the AAT will be given the power to pause or modify ATO debt recovery action in relation to disputed debts of small businesses.
▪ Self-education expenses – $250 threshold to be removed.
* * * Disclaimer: The information is sourced from NTAA. * * *
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their circumstances.