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Legislative Update – August 2016

What to expect when parliament resumes

Since the Federal Election is now finished and Coalition has returned to government, work can now progress on implementing the policies announced in the 2016-17 Federal Budget.

The new Federal Parliament is currently scheduled to commence sitting on 30 August 2016.

Below is a summary of some of the key tax and superannuation measures that the Coalition has previously announced that are yet to be implemented.

Corporate Tax

  • Reduce the company tax rate to 27.5 per cent from 1 July 2016 for small business companies (with annual aggregated turnover of less than $10 million) followed by a progressive reduction to 25 per cent over 10 years for all companies.
  • Increase access to company losses by replacing the same business test with a more flexible ‘predominantly similar business test’ (for losses incurred from 1 July 2015).

Small Business

  • Increase the small business entity aggregated turnover threshold (currently $2 million) to $10 million from 1 July 2016, resulting in increased access to the lower corporate tax rate and the current accelerated depreciation concessions. The current $2 million turnover threshold will be retained to access the small business capital gains tax concessions.
  • Increase the unincorporated small business tax discount from 5 per cent to 8 per cent on 1 July 2016 and progressively increase it to 16 per cent over 10 years. Access to the discount will be extended to individual taxpayers with business income from an unincorporated business that has an aggregated annual turnover of less than $5 million.

Personal tax

  • Increase the threshold at which the 37 per cent marginal tax rate cuts in from $80,001 to $87,001.

Superannuation

There have been many changes proposed including:

  • Reduce the threshold for the additional 15 per cent contribution tax (on their concessional contributions) for high income earners from $300,000 to $250,000.
  • Introduce a $1.6 million cap on balances that can be transferred into pension phase.
  • Reduce the annual concessional contributions caps to $25,000.
  • Allow all individuals up to age 75, regardless of their work circumstances, to make concessional contributions subject to the annual cap, or to make ‘catch-up’ contributions where they have not reached the cap in previous years.
  • Introduce a $500,000 lifetime non-concessional contributions cap.
  • Increase the income threshold for low income spouse contributions.
  • Introduce a Low Income Superannuation Tax Offset.
  • Reduce the tax concessional nature of transition to retirement income streams.

Other

  • Address the ‘double taxation’ of digital currencies under the GST.
  • Apply the GST to low value imported goods imported from 1 July 2017

<Seymour, Tom, Adam Davis, and Warren Dick. "Legislative Update- August 2016 | Lexology." Legislative Update- August 2016. N.p., 1 Aug. 2016. Web. 10 Aug. 2016. >

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