The Government’s full three stage personal income tax plan has been passed by both Houses of Parliament. These are the personal tax cuts that were announced in the 2018-19 Federal Budget.
The changes introduced by the legislation include:
- The introduction of a new low and middle income tax offset for the 2019 – 2022 income years, before the merging of this offset with the presently existing low income tax offset (LITO) in 2023;
- Amending the upper threshold for the 32.5% rate applicable to Australian residents from $87,000 to $90,000, for the 2019 – 2022 income years;
- Further amending the upper threshold of the 32.5% bracket to $120,000 in the 2023 and 2024 income years;
- Finally amending this upper threshold to $200,000 in the 2025 income year, such that the 37% tax bracket is removed; and
- Equivalent changes to the above for non-resident and working holiday maker tax rates.
Other tax related Bills before Parliament
- Extends the operation of the small business $20,000 instant asset write- off to 30 June 2019, and was introduced to the House of Representatives on 24 May 2018 and passed without amendment. It has since been introduced to the Senate on 25 June 2018.
- Includes amendments which broadly relate to removing the ability of foreign residents to access the main residence CGT exemption. This is still currently before the Senate (introduced on 19 March 2018).
- Contains the changes to eligibility for the small business CGT concessions for CGT events involving shares in a company or interests in a trust. The Bill was introduced to the Senate on 18 June 2018 and there have been a number of proposed amendments by the Opposition and the cross bench Senators, although none of these proposed amendments have yet been adopted. However, it appears that the Government may agree to change the start date from 1 July 2017 to 8 February 2018.
Should any Tax related reforms of bills and tax cut that pose impact on your finance, please free to come and speak to us Tax Ideas Accountants & Advisers…https://taxideas.com.au/booking/ Tel: (02) 8318 1545