The Treasurer delivered the Federal Budget this week revealing the Government's economic plan to secure Australia's recovery, including personal income tax cuts and business tax incentives.
The Treasurer delivered the Federal Budget this week revealing the Government's economic plan to secure Australia's recovery. The Government aims to create jobs, guarantee essential services and build a more resilient and secure Australia by the means of Personal income tax cuts, business tax incentives, new apprenticeships and training places, more infrastructure and record funding for schools, hospitals, aged care, mental health and the NDIS.
For Individuals
Extension of the Low and Middle Income Tax Offset (LMITO)
The LMITO was extended for a further year to the 2021-22 income year. The LMITO provides a reduction in tax of up to $1,080 and will be received on assessment after individuals lodge their tax return.
Superannuation Measures
- Super contributions work test will be repealed from 1 July 2022 for voluntary non-concessional and salary sacrificed contributions for those under age 75.
- Self-Managed Super Fund Residency rules will be relaxed by extending the central management and control test safe harbour from 2 to 5 years.
- Australians over the age of 60 will be allowed to make downsizer contributions.
First Home Super Saver Scheme
The maximum releasable amount of voluntary concessional and non-concessional contributions has been increased from $30,000 to $50,000.
For Businesses
Loss Carry-Back for Companies
Companies with turnover up to $5 billion will be allowed to offset losses against previous profits on which tax has been paid, to generate a refund. This will be extended to include the 2022-23 income year.
Temporary Full Expensing Extension
The Government has announced a twelve-month extension to the temporary full expensing measures until 30 June 2023. This will allow eligible businesses to deduct the full cost of eligible depreciable assets of any value.
Super Guarantee Contributions (SGC)
The proposed SGC rate increases to 10% from 1 July 2021 will go ahead as planned.
Digital Economy Strategy
$1.2 billion Digital Economy Strategy has been introduced aimed at taking advantage of the accelerated digital transformation resulting from COVID-19, including a 30% refundable Digital Games Tax Offset.
Please feel free to contact your trusted advisor at Vivid Partners should you have any questions about how these measures will affect you.