The Federal Budget for 2016-17 was handed down this evening. In order to put you on the front foot with your clients, Practising Tax has prepared a brief summary of some of the newly announced tax items in the Budget that you might like to know about.
- a wide ranging Superannuation Reform Package that includes, among many other things:
- a $500,000 lifetime cap for non-concessional superannuation contributions, to commence at 7.30 pm (AEST) on 3 May 2016;
- a $1.6 million cap on the total amount of accumulated superannuation an individual can transfer into the retirement phase, from 1 July 2017;
- removal of the tax exemption on earnings of assets supporting Transition to Retirement Income Streams from 1 July 2017 (irrespective of when the income stream commenced);
- an increase in the small business entity turnover threshold from $2 million to $10 million from 1 July 2016 - unless you are looking for access to the small business CGT concessions, in which case the threshold will stay at $2 million, or access to the unincorporated small business tax discount, in which case the threshold will increase to only $5 million;
- a progressive reduction in the company tax rate to 25% over the next ten years - it will not be down to 25% until 2026-27;
- targeted amendments to Div 7A to apply from 1 July 2018, including having a single compliant loan duration of ten years and better aligning calculation of the minimum interest rate with commercial transactions;
- an increase in the 32.5 per cent personal income tax threshold from $80,000 to $87,000 from 1 July 2016.