Reminder of some of the main tax changes for 2018
When applying the tax law detailed consideration must be given to a person’s or entity’s circumstances.
This process cannot be simply following a generic checklist and ticking boxes (a practice unfortunately rife in many firms) or doing exactly what was done the year before.
Tax and superannuation laws are constantly changing such that the application of the law in one year may be different in a subsequent year.
For this reason, checking with your Nexia advisor on how the law will apply to the transaction is important when embarking on a significant transaction.
Set out below are some of the main brand new tax changes that affects the 2018 income tax year:
a) 27.5% company tax rates for companies carrying on business with a turnover of less than $25 million – as per the current law as at the date of this top tax tips;
b) No more budget repair levy (so top marginal tax rate is 47%);
c) No more travel deductions to inspect residential rental properties;
d) Limited depreciation deductions on previously used plant and equipment in residential rental properties;
e)12.5% foreign resident CGT withholding tax (and a $750,000 threshold);
f) First year of first home super saver scheme to enable taxpayers to buy their first home [i.e. can make superannuation contributions to a maximum of $15,000 (if single) and $30,000 (if couple) in 2018];
g) Superannuation contributions of individuals earning income of more than $250,000 will be taxed at 30% and payable by the individual although the individual can complete a release authority to obtain reimbursement from their superannuation fund;
h) Salaried workers can now claim a deduction for personal superannuation contributions.
SME businesses should also consider whether they can qualify for:
a) Small business entity concessions (e.g. $20,000 instant asset write-off, small business restructure rollover, simplified depreciation and trading stock rules etc.) – for businesses with a turnover of less than $10 million; or
b) Small business CGT concessions on the sale of the business – for businesses with a turnover less than $2 million or net assets of less than $6 million.
A reminder to check out our new website and take advantage also of the Online Chat functionality where you can ask Peter directly for any advice or questions.
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