What’s changing on 1 July 2018?

Individuals Personal tax bracket changes – The top threshold of the 32.5% personal income tax bracket will increase from $87,000 to $90,000*. Introduction of the Low and Middle Income Tax Offset* providing a tax offset for those with taxable income of up to $125,333. GST on property developments and residential subdivisions – The way GST is collected on sales of newly constructed residential properties or new subdivisions will change from … Read more

One-off Super Guarantee Amnesty

Employers that have fallen behind with their superannuation guarantee (SG) obligations will have 12 months to “self-correct” under a new amnesty announced late last month. The ATO estimates that $2.85 billion is currently owed in late or missing SG payments. Running from 24 May 2018 for 12 months, the amnesty encourages employers to reduce this SG gap by providing relief from the punitive penalties that normally apply to late payments. … Read more

CGT and the family home: Expats and foreign residents beware

The family home of foreign residents and expats may be taxed if legislation before Parliament is passed by the Senate. If you are a foreign resident living in Australia or an Australian working overseas who owns residential property in Australia, this reform potentially has serious tax implications for you. Currently, individuals are generally not subject to capital gains tax (CGT) on the sale of the home they treat as their … Read more

Tax Deductions: the danger zones

A recent Parliamentary Inquiry into Tax Deductions created some fairly sensational headlines about what and how deductions are being claimed – $22 billion worth to be exact. In Australia, tax deductions are available for expenses incurred in producing assessable income. These are generally work-related deductions or investment related deductions. And, unlike some other countries, these expenses can be offset against taxable income including wages (other countries only allow deductions relating … Read more

Should you use the new super measures when you buy/sell your home?

From 1 July 2018, new laws come into effect allowing first home buyers to use their super to help buy a home, and at the other end of the spectrum, downsizers to contribute proceeds from the sale of their home to super without many of the normal restrictions. The pros and cons of using your super to save for your first home The First Home Super Saver Scheme (FHSS) enables … Read more

Single Touch Payroll: what you need to know

Single Touch Payroll (STP) – the direct reporting of salary and wages, PAYG withholding and superannuation contribution information to the ATO – comes into effect from 1 July 2018. For employers Employers with 20 or more employees at 1 April 2018 must use standard business reporting-enabled software from 1 July 2018. The head count for ‘20 employees’ includes full-time, part-time, casuals (who worked any time during March), employees based overseas, … Read more

Will your business be audited?

How the ATO identifies audit targets The ATO is very upfront when it comes to their compliance activity. Every year they publish small business benchmarks that outline what a typical business ‘looks like’ in different industries. If your business falls outside of those benchmarks, the ATO is likely to take a closer look at why that is. Falling outside of the benchmarks might not indicate a tax related problem. It … Read more

GST on property developments

The big changes for developers and purchasers If a Bill currently before Parliament passes, from 1 July 2018, purchasers of new residential premises or new residential subdivisions will need to remit the GST on the purchase price directly to the ATO as part of the settlement process.  This is a significant change from how GST is currently managed with the developer collecting the full proceeds and remitting GST to the … Read more

The ATO’s FBT Hot Spots

The Fringe Benefits Tax (FBT) year ends on 31 March. We’ve outlined the key hot spots for employers and employees. Motor Vehicles – using the company car outside of work Just because your business buys a motor vehicle and it is used as a work vehicle, that alone does not mean that the car is exempt from FBT. If you use the car for private purposes – pick the kids … Read more

What’s changing in 2018?

1 January 2018 Vacancy fees for foreign acquisitions of residential land – An annual vacancy fee imposed on foreign owners of residential real estate if the property is not occupied or genuinely available on the rental market for at least 183 days in a particular 12 month period. Foreign owners can avoid the fee by living in the property (or have a family member live in the property), leasing the … Read more