{"id":3580,"date":"2019-04-03T03:39:56","date_gmt":"2019-04-03T03:39:56","guid":{"rendered":"https:\/\/cstau.wpengine.com\/?p=3580"},"modified":"2024-04-29T01:10:20","modified_gmt":"2024-04-29T01:10:20","slug":"cst-clients-need-know-budget-announcements","status":"publish","type":"post","link":"https:\/\/csttax.com\/en-au\/blog\/cst-clients-need-know-budget-announcements\/","title":{"rendered":"What CST Clients Need To Know About The Budget Announcements"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The big tax announcement in this week\u2019s budget centred around:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Further personal income tax cuts;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Increased asset write offs for small business;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Increased funding for the ATO to tackle tax avoidance and evasion.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Updates to previous announcements included:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">A delay in changes to Division 7A which deals with loans from private companies to shareholders;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">No mention of the Proposed Removal of CGT Main Residence Exemption for non-residents (including Australian Expatriates).<\/span><\/li>\n<\/ul>\n<h2><b>Personal Income Tax Cuts<\/b><\/h2>\n<h3><b>What is changing?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The government will be increasing the Low and Middle Income Tax Offsets (LMITO). Under the changes, the reduction in tax provided by LMITO will increase from a maximum amount of $530 to $1,080 per annum and the base amount will increase from $200 to $255 per annum for the 2018-19, 2019-20, 2020-21 and 2021-22 income years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Government will also progressively reduce the number of income tax brackets to 3 by 2024-2025 by which time there would only be 3 personal income tax rates \u2013 19%, 30% and 45% (abolishing the 37% bracket).<\/span><\/p>\n<h3><b>What does this mean?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Low to medium income earners (those earning less than $125,333) will pay less tax when the LMITO offset is applied.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The objective of the tax bracket changes is to have 95% of Australia\u2019s population paying no more than 30% on income tax by 2024-2025.<\/span><\/p>\n<h2><b>Increased Asset Write Offs For Small Business<\/b><\/h2>\n<h3><b>What is changing?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The instant asset write-off threshold for businesses with an aggregated turnover of less than $10m will be increased to $30,000 for eligible assets that are first used, or installed ready for use, from 7.30 pm (AEDT) on 2 April 2019 to 30 June 2020.<\/span><\/p>\n<h3><b>What does this mean?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Small businesses are able to completely write-off assets worth up to $30,000 in the financial year that they started using them rather than depreciating them provided the expenditure is incurred after 2 April 2019 and before 30 June 2020.<\/span><\/p>\n<h2><b>ATO To Receive $1 Billion Of Funding To Tackle Tax Avoidance And Evasion<\/b><\/h2>\n<h3><b>What is changing?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The Government will provide $1.0bn over 4 years from 2019-20 to the ATO to extend the operation of the Tax Avoidance Taskforce and to expand the Taskforce&#8217;s programs.<\/span><\/p>\n<h3><b>What does this mean?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The Taskforce will undertake compliance activities not only targeting multinationals and large public companies, but also private groups, trusts and high wealth individuals.<\/span><\/p>\n<h2><b>Delay in changes to Division 7A (Loans from private companies to shareholders)<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The government has been undertaking consultation in relation to changes that it wishes to introduce to Division 7A which would include, among other things, eliminating the possibility of 25 Year Division 7A loans.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Government issued a Consultation Paper in October 2018 seeking views on the proposed implementation approach for the amendments to Division 7A of the ITAA 1936.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Government said it received valuable feedback which highlighted that Division 7A is a complex area and changes being considered in the Consultation Paper warrant further consideration.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Government has agreed to delay the start date for proposed changes by 12 months to allow additional time to further consult with stakeholders and to refine the Government&#8217;s approach, to ensure appropriate transitional arrangements so taxpayers are not unfairly prejudiced.<\/span><\/p>\n<h2><b>Proposed Removal of CGT Main Residence Exemption for non-residents (including Australian Expatriates)<\/b><\/h2>\n<p><span style=\"font-weight: 400;\"> There was no mention in the Budget of the Government\u2019s intention in relation to the widely criticised <\/span><i><span style=\"font-weight: 400;\">Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018. <\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Although there is no official comment, we do not expect that the Bill will proceed in its current form although depending on the outcome of the election, it may be re-introduced in a modified form. The Bill still has major and well documented shortcomings as we indicated in a <\/span><b><a href=\"https:\/\/csttax.com\/en-au\/blog\/australian-expats-still-awaiting-governments-decision\/\">previous article<\/a>.<\/b><\/p>\n<p>Author: Matthew Marcarian<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The big tax announcement in this week\u2019s budget centred around: Further personal income tax cuts; Increased asset write offs for small business; Increased funding for the ATO to tackle tax avoidance and evasion. Updates to previous announcements included: A delay in changes to Division 7A which deals with loans from private companies to shareholders; No [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":6222,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-3580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-australian-tax-system"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What CST Clients Need To Know About The Budget Announcements - CST Tax Australia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What CST Clients Need To Know About The Budget Announcements - CST Tax Australia\" \/>\n<meta property=\"og:description\" content=\"The big tax announcement in this week\u2019s budget centred around: Further personal income tax cuts; Increased asset write offs for small business; Increased funding for the ATO to tackle tax avoidance and evasion. 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