How Will the New Financial Year Affect You?

03Jul '17

How Will the New Financial Year Affect You?

The EOFY heralds a number of important tax changes. At Best Business Practice, we endeavour to keep you abreast of important updates, so that you can maximise your tax refund and concessions. We’ve summarised some handy hints in getting the best out of your business and personal tax returns. These changes will take effect as of 1 July 2017.

 

  1. For businesses with an aggregated, annual turnover of $10 million or less, the small company tax rate has been decreased from 28.5% to 27.5%.
  2. For businesses with an aggregated annual turnover of less than $5 million a year, the small businesses tax offset will increase from 5% of tax on business income, to 8%, with a cap on the maximum tax offset of $1000.
  3. The yearly threshold on concessional superannuation contributions will be reduced to $25, 000. Last financial year, the limit was $30, 000 for individuals under 50 and $35, 000 for those over 50. The non-concessional contributions threshold was also decrease, from 180, 000 to $100, 000 and anyone with a significant superannuation balance of over $1.6 million will be unable to make non-concessional contributions.
  4. The cap at which the 37% marginal tax rate applies for individuals has increase from $80, 000 to $87, 000 for the 2017 and 2018 tax year.
  5. Businesses who are able to alter their legal structure may be eligible for capital gains tax rollover relief.
  6. First homeowners in NSW will be winners under the new scheme and will be exempt from stamp duty on new or existing homes worth up to $650, 000 and discounts will apply to properties worth up to $800, 000. The foreign investor surcharge on stamp duty will also be doubled from 4 per cent to 8 per cent, while land tax will be increased from 0.75 per cent to 2 per cent. The $5000 new home grant scheme for investors will also be abolished.
  7. The $1.6 million transfer balance cap will apply to the total amount of accumulated superannuation an individual can transfer into the tax-free retirement phase. Earnings on any excess of this cap will be taxed at 15%.
  8. Regardless of employment arrangements, you may claim deductions for personal superannuation contributions. The old test would use the 10% income rule to determine whether an individual was eligible to deduct personal superannuation contributions. Those under 65 years can claim a tax deduction for their personal superannuation contributions up to the $45, 000 superannuation contribution cap. Those aged between 65 and 74 who want to claim a deduction must also meet a work test.

 

For more information on tax and superannuation reforms which kicked in on 1 July 2017, contact Best Business Practice on 02 6672 6700. Best Business Practice has remote services, and consultations are able to be conducted via Skype. 

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