... for individuals, their superannuation and their businesses.

Transcription

1 tax facts

2 ... for individuals, their superannuation and their businesses. For individuals 1.1 Income tax rates 1.2 Medicare levy surcharge 1.3 Low income tax offset 1.4 Tax discount for unincorporated small businesses 1.5 Minor tax rates 1.6 Motor vehicle business deductions 1.7 Paid Parental Leave Scheme 1.8 Reduction in Private Health Insurance rebate 1.9 Higher Education Loan Programme For businesses 2.1 Company tax 2.2 Business Activity Statements 2.3 Goods and Services Tax 2.4 Fringe Benefits Tax 2.5 Payroll tax 2.6 Superannuation guarantee 2.7 Important dates 2.8 CGT and other concessions for small business entities 2.9 Capital allowances For superannuation 3.1 Income tax rates 3.2 Superannuation contributions 3.3 Employment Termination Payment 3.4 Redundancy or early retirement 3.5 Low rate cap withdrawal amount 3.6 Minimum annual pension payments 3.7 Transition to retirement 3.8 Preservation age 3.9 Maximum superannuation contribution base 3.10 Stronger superannuation review measures Additional information 4.1 Payment and lodgement dates 4.2 Capital Gains Tax 4.3 Stamp duty 4.4 Transfer of property Useful contacts Australian Taxation Office Department of Human Services APRA ASIC State Revenue Offices

3 for individuals Income tax rates Resident tax rates * Taxable income Tax on this income 0 $18,200 Nil $18,201 $37, c for each $1 over $18,200 $37,001 $87,000 $3, c for each $1 over $37,000 $87,001 $180,000 $19, c for each $1 over $87,000 $180,001 and over $54, c^ for each $1 over $180,000 Non-resident tax rates Taxable income Tax on this income 0 $87, c for each $1 $87,001 $180,000 $28, c for each $1 over $87,000 $180,001 and over $62, c^ for each $1 over $180,000 * Add 2% Medicare levy except for low income earners. ^ Add 2% Budget Repair levy for taxable income over $180,000 from 1 July 2014 to 30 June Medicare levy surcharge An additional Medicare levy surcharge is payable by taxpayers without adequate private patient hospital insurance. The surcharge is calculated based on your adjusted taxable income. 1.3 Low income tax offset Effective Income Max Full tax free year offset entitlement threshold Phasing out $445 Income < $37,000 $20,542 $37,000 $66, $445 Income < $37,000 $20,542 $37,000 $66, $445 Income < $37,000 $20,542 $37,000 $66, Tax discount for unincorporated small businesses You may be eligible for a tax offset if you are an individual who is a small business entity or where assessable income includes a share of the net income of an unincorporated small business entity. You may be eligible for a tax offset of up to 8% of your basic income tax liability, capped at $1,000 for the year. 1.5 Minor tax rates Special rates apply to children under the age of 18 who receive unearned income such as investment income. Featured rates apply to minors who are residents of Australia, are not excepted persons, and have no excepted income. Minors cannot use the low income tax offset to reduce tax on unearned income. Medicare levy surcharge / / / Income thresholds Rate of Individual Family surcharge Tier 0 Up to $90,000 Up to $180,000 0% Tier 1 $90,001 $105,000 $180,001 $210,000 1% Tier 2 $105,001 $140,000 $210,001 $280, % Tier 3 $140,001 and above $280,001 and above 1.50% Other income * Tax rates $0 $416 Nil $417 $1,307 Nil+66% of the excess over $416 Over $1,307 47% of the total amount of income that is not excepted income * NB From 1 July 2014 unearned income of minors greater than $416 will be subject to the 2% Budget Repair levy.

4 1.6 Motor vehicle business deductions 2016 tax return Alternatives available for work related expense claims for individuals: a Business use kilometres From 1 July 2015 the Government introduced a flat rate deduction for all vehicles of 66 cents per kilometre, up to a maximum of 5,000 kilometres for work related purposes. b Log book method regardless of distance Business usage as established by log book applied to actual expenses. 1.8 Reduction in Private Health Insurance (PHI) rebate 1 July 2016 to 31 March 2017 Base Tier 1 Tier 2 Tier 3 Singles $90,000 or less $90,001 $105,000 $105,001 $140,000 $140,001 or more Families * $180,000 or less $180,001 $210,000 $210,001 $280,000 $280,001 or more Rebate Aged < % % 8.930% 0% Aged % % % 0% Aged 70 > % % % 0% * The family income threshold is increased by $1,500 for each dependent child after the first child. NB The rebate levels may change annually from 1 April and the Department of Health will publish these percentages in April NB Motor vehicle depreciation cost limit $57,581 for Paid Parental Leave Scheme The Australian Government introduced a Paid Parental Leave Scheme which was effective from 1 January The scheme involves an income test of $150,000 based on the primary carer s adjusted taxable income in the year either before the date of birth, or the claim date, whichever is earlier. Payments are taxable and set at the Federal Minimum Wage which is currently $ per week, for up to 18 weeks. The Newborn Payment and Paid Parental Leave are mutually exclusive and both cannot be paid for the same child. From 1 January 2013 the Paid Parental Leave Scheme was expanded to include a new two week payment for working fathers and partners. 1.9 Higher Education Loan Programme (HELP) Repayment thresholds and rates Repayment Income (RI * ) Repayment rate Below $54,869 Nil $54,869 $61,119 4% of RI $61,120 $67, % of RI $67,369 $70,909 5% of RI $70,910 $76, % of RI $76,223 $82,550 6% of RI $82,551 $86, % of RI $86,895 $95,626 7% of RI $95,627 $101, % of RI $101,900 and above 8% of RI * RI = Taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefits amounts, reportable superannuation contributions and exempt foreign employment income.

5 for businesses Company tax Aggregated turnover < $2 million 30.0% 28.5% 28.5% > $2 million 30.0% 30.0% 30.0% NB There are proposed changes at the time of publishing to the company tax rate. 2.2 Business Activity Statements (BAS) BAS are required to be lodged by taxpayers to report and pay their tax obligations, including: GST Pay As You Go (PAYG) withholdings FBT instalments Pay As You Go (PAYG) instalments Luxury Car Tax Fuel Tax Credits Division 7A benchmark interest rate (from 1 July 2016) 5.40% Prescribed interest rate PSLA 2010/4: Option % Quarterly Pay As You Go (PAYG) instalments 1st 2nd 3rd 4th 28/10/16 28/02/17 28/04/17 28/07/17 Monthly Pay As You Go (PAYG) instalments * Jul Sep 21/08/16 21/09/16 21/10/16 Oct Dec 21/11/16 21/12/16 21/01/17^ Jan Mar 21/02/17 21/03/17 21/04/17 Apr Jun 21/05/17 21/06/17 21/07/17 * Corporate Tax Entities with a base assessment instalment income exceeding $20 million were required from 1 January 2016 to start paying PAYG instalments monthly. All other entities exceeding the $20 million base assessment instalment income will follow from 1 January ^ Small business clients who lodge electronically (that is, less than $10 million turnover) may lodge on 21 February Instalments are only payable if the taxpayer has received an instalment rate notice from the Commissioner. Options are available for calculating instalments and the number of instalments payable each year according to the Commissioner s guidelines. Companies with substituted accounting periods that report quarterly pay PAYG instalments on the 28th day after each quarter end. Any balance of tax payable is due on lodgement of company tax return. The Gross Domestic Product (GDP) adjustment used to calculate PAYG instalments is 2%. Extensions available using self-assessed deferral. Different dates can apply for electronic lodgement. 2.3 Goods and Services Tax (GST) rate * 10% Annual turnover * threshold for registration $75,000 ($150,000 for non-profit organisations) Annual turnover^ for accrual accounting $2 million Annual turnover^ threshold for monthly payments $20 million # * Calculated as 1/11th of the GST inclusive value. ^ Annual turnover includes taxable and GST free supplies connected with Australia. May choose to register if turnover is below registration turnover threshold. # If GST turnover is $20 million or more, activity statements must be lodged electronically. 2.4 Fringe Benefits Tax 1 April March 2017 Rate % Fringe benefits gross up factor * Return and payment due^ 21 May 2017 Benchmark interest rate % Instalment threshold $3,000 Reportable fringe benefits threshold $2,000 (per employee) # Record keeping exemption threshold $8,164 In-house FBT-free threshold $1,000 Car parking threshold $8.48 Minor infrequent benefits ** Less than $300 * If an employer was entitled to an input tax credit for the benefits provided otherwise the rate of will apply. ^ Instalment payments are due with quarterly Business Activity Statements. # Reportable fringe benefits threshold grossed up $3,921. ** Minor benefits may include welcome gifts, health assessments or meal entertainment two to three times per year. The ATO warns infrequent or irregular should not be equated with isolated or rare.

6 Motor vehicle statutory formula The percentage scale for valuing car fringe benefits has been replaced with a single statutory rate of 20%. The changes are phased in as follows: FBT statutory rate method Distance travelled Statutory rate during FBT year From 1 April 31 March x cost of car to determine person s car fringe benefit Existing New contracts from contracts* 10/5/11 1/4/12 1/4/13 1/4/14 Less than 15,000km 26% 20% 20% 20% 20% 15,000 24,999km 20% 20% 20% 20% 20% 25,000 40,000km 11% 14% 17% 20% 20% 40,000km and over 7% 10% 13% 17% 20% * Existing contracts prior to 10 May Payroll tax VIC NSW QLD SA TAS WA ACT NT Threshold ( 000) , , ,000 1,500 Rate on excess 4.85% 5.45% 4.75% 4.95% 6.1% 5.5% 6.85% 5.5% Monthly payroll 47,916 ^ threshold * 91,666 50,000 # 70, , ,000 * Amounts above these thresholds may be liable for payroll tax. ^ NSW monthly payroll threshold varies based on the days in the month: 28 days $57,534, 30 days $61,644, 31 days $63,699. # Tasmania monthly payroll threshold is calculated by: Number of days in the month, divided by days in the year, multiplied by $1.25 million. 2.6 Superannuation guarantee Minimum level of support 9.50% Minimum (per month) salary $450 Maximum contribution base $51,620 for each quarterly period Due dates for contributions 28/10/16 28/01/17 28/04/17 28/07/ Important dates Quarterly BAS & IAS Paper Electronic agent Jul Sep 28/10/16 25/11/16 Oct Dec 28/02/17 28/02/17 Jan Mar 28/04/17 26/05/17 Apr Jun 28/07/17 * 25/08/17 * * To be confirmed. NB Where date falls on a weekend or public holiday, lodgement is the next business day. Monthly BAS & IAS Jul Sep 21/08/16 21/09/16 21/10/16 Oct Dec 21/11/16 21/12/16 21/01/17 * Jan Mar 21/02/17 21/03/17 21/04/17 Apr Jun 21/05/17 21/06/17 21/07/17^ * The December 2016 monthly BAS for small business clients (with less than $10 million turnover) is due on 21 February ^ To be confirmed. NB Where date falls on a weekend or public holiday, lodgement is the next business day. Payment Summaries Issued to employees 14/07/17^ Lodged to ATO * 14/08/17^ * Unless concessions apply. ^ To be confirmed. 2.8 CGT and other concessions for small business entities Eligible businesses may choose which concessions suit their circumstances, however additional conditions may apply. There are four small business Capital Gains Tax (CGT) concessions: 1 Small business 15 year exemption Provides total exemption of a capital gain if CGT asset owned for at least 15 years and significant individual is aged 55 or over and retiring, or is permanently incapacitated. 2 Small business 50% active asset reduction Provides 50% reduction of a capital gain from the disposal of a CGT asset that qualifies as an active asset.

7 3 Small business retirement exemption Provides exemption of capital gains up to a lifetime limit of $500,000. If eligible individual is under 55 years of age, payment must be paid into a superannuation (or similar) fund. 4 Small business rollover Provides deferral of all or part of a capital gain if you acquire a replacement asset, or you make a capital improvement to an existing asset, subject to timing conditions. For further information or advice on the small business CGT concessions, please contact your Advisor. Other available concessions Simplified depreciation rules. Simplified trading stock rules. Immediate deduction for certain prepaid business expenses. Choice to account for GST on a cash basis. Annual apportionment of GST input tax credits. Choice to pay GST by instalments. PAYG instalments based on Gross Domestic Product (GDP) adjusted notional tax. FBT car parking exemption. 2.9 Capital allowances Asset acquired Rate Pre 21/9/1999 Accelerated Post 21/9/1999 Effective life Cost less than $1, % diminishing if pooled * * 18.75% for first year in pool. Different rates apply to Simplified Tax System taxpayers *. Business establishment and many other business related costs are deductible over five years. Building write-off 2.5% per annum if construction started before 22 August 1984 or after 15 September Limited post 26 February 1992 construction may be eligible for a 4% deduction. Subject to certain conditions, items costing $100 or less may be fully deducted in year of purchase. Diminishing value assets with a Written Down Value (WDV) less than $1,000 can be moved to the low value asset pool and depreciated at 37.5%. * Some aspects are currently being reviewed by Government. Diminishing value method Diminishing value method allows taxpayers a higher decline in value deduction earlier in the effective life of depreciating assets and eligible project pools. The formula for diminishing value method is: Decline = Base value x Days held x 200% in value 365 Asset s effective life Temporary small business depreciation threshold The Government has allowed small businesses with an aggregated annual turnover of less than $2 million in the previous and current financial year to write off assets with a value up to $20,000 (excluding gst), purchased after 7:30pm on 12 May 2015 until 30 June At the time of writing the turnover test is proposed to increase to $10 million with effect from 1 July 2016.

8 for superannuation Income tax rates Complying superannuation fund 15% * Non-complying superannuation fund 45%^ Tax rate non-arms length income and 45%^ private company dividends * Rate applies to superannuation funds in accumulation mode; funds in pension mode attract 0%. For funds with members in both accumulation and pension, funds in accumulation mode taxed separately. ^ Add 2% Budget Repair levy for taxable income over $180,000 from 1 July 2014 to 30 June NB From 1 July 2017 superannuation taxes will change generally. Concessional Contributions cap Income year General cap Aged 49+ cap * $30,000 $35, $30,000 $35,000 * As at 30 June in prior year. Concessional Contributions (CC) include employer contributions (including salary sacrifice) and personal contributions claimed as a tax deduction by a self-employed person. 3.2 Superannuation contributions Age Ability of fund to accept contributions Under 65 All types of contributions Mandated (award and Super Guarantee) employer contributions Or if member passes work test * : Employer contribution other than mandated Member contributions Spouse contributions Mandated (award and Super Guarantee) employer contributions^ Or if member passes work test * : Employer contribution other than mandated Member contributions Contributions other than mandated employer contributions must be received by the fund no later than 28 days after the end of the month in which the member turns 75 years of age 75 and over Mandated (award and Super Guarantee) employer contributions only^ Non-Concessional Contributions cap NCCs include personal contributions not claimed as a tax deduction and amounts in excess of the CC cap. If you are aged under 65 years, you may contribute up to three times your Non-Concessional Contributions (NCC) cap within a three year period. However, your NCC cap for the three year period is based on the income year you trigger the bring-forward rule. Bring-forward Non-Concessional Non-Concessional Income year Contributions Cap Contributions cap * $180,000 $540, $180,000 $540, $180,000 $540,000 * If you are aged under 65 years only. * To satisfy the work test members must be gainfully employed during the financial year for at least 40 hours in a period not more than 30 consecutive days. ^ From 1 July 2013, there will no longer be an age limit on employees for whom employers have Super Guarantee obligations.

9 Small business CGT cap amount Under the small business CGT cap, you can exclude from your annual super Non-Concessional Contributions cap an amount up to the CGT cap during your lifetime. The CGT cap applies to all excluded CGT contributions, whether they were made between 10 May 2006 and 30 June 2007 or after 30 June The CGT cap amount is indexed in line with Average Weekly Ordinary Time Earnings (AWOTE), in increments of $5, Low rate cap withdrawal amount Income year Amount $195,000 The low rate cap is the limit set on the amount of the taxable component of a super lump sum benefit that you can receive at a lower or nil tax rate. The low rate cap applies if you have reached your preservation age but are below 60. The cap is indexed in line with AWOTE, in increments of $5,000 (rounded down). Income year Amount $1,315, $1,355, $1,395, $1,415, Employment Termination Payment (ETP) Post 30/6/1983 Preservation age ETP component Under Over Non-genuine Up to $195,000 30% * 15% * hardship income cap Over $195,000 45% * 45% * income cap * Excludes Medicare levy of 2%. NB From 1 July 2012, individuals who receive an ETP relating to genuine hardship (genuine redundancy, early retirement scheme or certain compensation) may still be able to access the ETP tax concessions up to an ETP cap of $195,000. ETPs, other than Transitional Termination Payments, cannot be rolled into superannuation and must instead be taken in cash. For the whole of income cap is $180, Redundancy or early retirement Tax free amount = $9,936 + ($4,969 x years of service) The balance of a redundancy or early retirement payment is taxed as an ETP. 3.6 Minimum annual pension payments 30 June 2017 year From 1 July 2007, a minimum amount is required to be paid each year. There is no maximum amount other than your superannuation balance. Age Required payments Under 65 4% % % % % % 95 and over 14% 3.7 Transition to retirement A member who has reached their preservation age may commence a transition to retirement pension without having to retire. The assessable component of the income stream is taxed at marginal rates. A tax offset of 15% of the taxable component is available to the recipient. From 1 July 2016 to 30 June 2017 a pension can range between a minimum of 4% and a maximum of 10% of the member balance. From 1 July 2017, taxes will be applicable to earnings on the TRIS balance.

10 3.8 Preservation age Generally you must reach preservation age before you can access your super. Date of birth Preservation age Before 01/07/ /07/ /06/ /07/ /06/ /07/ /06/ /07/ /06/ After 30/06/ Maximum superannuation contribution base The maximum superannuation base is used to determine the maximum limit on any individual employee s earnings base for each quarter of any financial year. You do not have to provide the minimum support for the part of earnings above this limit. Income year * Per quarter 2017 $51, $50, $49, $48, $45,750 * Indexed in line with AWOTE each income year Stronger superannuation review measures From 7 August 2012, a number of new regulations for SMSFs were implemented. These include: Consideration of insurance for members as part of the fund s investment strategy; and That the fund s investment strategy is regularly renewed.

11 additional information Payment and lodgement dates Payment Lodge Taxable large/medium 01/12/16 15/01/17 companies and super funds Substituted Accounting Period 1st day of 15th day of (SAP) companies and 6th month 7th month super funds after year end after year end Individuals and Trusts (Tax level 6) 31/03/17 Non large/medium companies and super Lodge and pay funds with income less than $2m in prior year 31/03/17 Other taxable businesses 15/05/17 Non-taxable businesses 05/06/17 (excluding large/medium businesses) Individuals and trusts (not mentioned above) 05/06/17 * * For entities which were non-taxable or received a credit assessment in the latest year lodged and are actually non-taxable or receiving a credit assessment in the current year. NB New registrants or taxpayers with returns outstanding may have different lodgement dates to the above. 4.2 Capital Gains Tax (CGT) Exemption/Discounts Amount Discount on capital gains for 50%^ 4.3 Stamp duty As is the case with Federal Laws, Stamp Duty rates are subject to periodic change. Please consult your Advisor. 4.4 Transfer of property Maximum stamp duty rates State Consideration Duty payable VIC * Over $960, % NSW ** Over $1,000,000 $40,490+$5.50 for every $100 excess QLD Over $1,000,000 $38,025+$5.75 for every $100 excess SA Over $500,000 $21,330+$5.50 for every $100 excess TAS Over $725,000 $27,810+$4.50 for every $100 excess WA^ Over $500,000 $19,665+$5.15 for every $100 excess NT # Over $525, % ACT Over $1,455, % * Applies to transfer of real property. ** Premium property duty of 7% is payable on excess over $3 million of residential properties. ^ Residential rate $28,453+$5.15 for every $100 excess over $725,000. # Where dutiable value is over $3 million, duty is 5.45% of that amount. NB Various states may have concessions, for example, First Home Buyers. Individuals and Trust * Discount on capital gains for One third Superannuation Funds * Maximum net asset threshold for CGT $6 million small business exemptions Turnover threshold for $2 million small business concessions Retirement exemption on capital gains $500,000 Indexation number # CGT improvement threshold $145,401 * Assets must be held for at least 12 months other limitations apply. Other small business concessions may apply. ^ The capital gain discount for non-residents has been removed. # Indexation frozen from 30 September 1999.

12 ... useful contacts. Useful contacts Phone Web Australian Taxation Office Business Info Line Superannuation Info Line Personal Info Line Department of Human Services Older Australians Line (eg retirement) Families & Parents Line National Business Gateway APRA ASIC State Revenue Offices Victoria NSW Queensland WA Tasmania South Australia Northern Territory ACT

13 A specialist part of Perpetual Fordham Business Advisors Pty Ltd ABN Liability limited by a scheme approved under Professional Standards Legislation Melbourne Level 35, Rialto South Tower, 525 Collins Street, Melbourne VIC 3000 Sydney Level 18, Angel Place, 123 Pitt Street, Sydney NSW 2000 Brisbane Level 15, Central Plaza 1, 345 Queen Street, Brisbane QLD 4000 Perth Level 29, Exchange Plaza, 2 The Esplanade, Perth WA 6000 This publication has been prepared by Fordham Business Advisors Pty Ltd and Perpetual Trustee Company Limited ABN , AFSL (PTCo). Fordham is part of the Perpetual Limited Group. Perpetual Private advice and services are provided by PTCo. The information in this guide is based on information published by the Australian Taxation Office and is believed to be accurate at the time of compilation. It has been provided in good faith, as general information only. The tax information contained in this document is not tax advice and should not be relied on as such. It contains general information only and is not intended to provide you with advice or take into account your personal objectives, financial situation or needs. You should consider whether the information is suitable for your circumstances and we recommend that you seek professional advice. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. (1/2017)