We’ll see what eventually passes into law, but in the meantime this is what Malcolm and Scott are proposing;
Effective Budget Night – 7.30pm (AEST) 3 May 2016
A lifetime cap of $500,000 for un-deducted (non-concessional) contributions into your super fund. This includes all non-concessional contributions made since 1 July 2007, and will be indexed to average weekly earnings. Importantly this will replace the current limit of $180,000 per year or $540,000 over 3 years. It will also apply to defined benefit funds and Government funds.
Changes effective 1 July 2016
Targeted personal income tax relief
The 32.5% marginal tax rate threshold will increase from $80,000 to $87,000.
Small Business Income Tax Offset (SBITO)
The current 5% discount on business income tax will increase to 8%. Applicable to sole trader, partnerships and trusts and capped at $1,000.
Company tax rate
Small business company tax rate to reduce from 28.5% to 27.5%.
Small business entity (‘SBE’) turnover threshold
The turnover threshold will increase from $2 mil to $10 mil, except for the CGT concessions and SBITO. This still makes available concessions such as simplified depreciation, trading stock and GST.
Changes effective from 1 July 2017
New lifetime cap for non-concessional superannuation contributions
If your super fund balance is less than $500,000 you will be able to catch up any unused concessional contribution cap from the previous 5 years. For example, if you have contributed $10,000 into your super fund each year for 4 years, in the 5th year you will be able to contribute up to $85,000, being the one year cap of $25,000 plus 4 years of $15,000 that was below the $25,000 annual cap.
Taxing earnings on assets supporting a Transition to Retirement Income Stream
The current tax exemption on earnings within super that are sourced from funds supporting a Transition to Retirement Income Stream (TRIS) will be removed. All super fund earnings will now be subject to 15% tax.
$1.6 million ‘superannuation transfer balance cap’
A cap of $1.6 mil will be introduced on the amount that can be used to setup a Superannuation pension.
Reducing the concessional contributions cap
The annual cap on concessional superannuation contributions will be reduced to $25,000. Until 1 July 2017, the existing concessional contributions caps, being $30,000 for those aged under age 50 years, and $35,000 for those aged 50 years and over, will apply.
Changes to the contribution rules for those aged 65 to 74
Remove the current restrictions on people aged 65 to 74 from making superannuation contributions for their retirement.
Tax deductions for personal superannuation contributions
All individuals will be able to claim a tax deduction for superannuation contributions. Some defined benefit, Government and untaxed funds will be exempt from this concession.
Improve superannuation balances of low income spouses
The Spouse Super Contribution Tax Offset income threshold will increase from $10,800 to $40,000.
Low Income Superannuation Tax Offset
A tax offset similar to the current Low Income Superannuation Contribution. Instead of a contribution it will be a non-refundable tax offset up to $500.
GST on low value goods imported by consumers
Overseas suppliers with a turnover of $75,000 will be required to charge GST.