There are many tax changes in effect from 1 July 2017. Here we provide a summary of Superannuation, Personal Tax and Business Tax changes that you need to be aware of.
- Concessional Contribution Limits (tax deductible): will be reduced down to $25K cap for everyone.
- Non Concessional Contribution Limits (not deductible): new yearly cap of $100K to replace the current $180K 2016/17 cap (with a lifetime cap of $500K).
- Division 293 Threshold: the threshold will reduce to $250K, meaning those who earn over this threshold (inc super contributions) will be required to pay 30% tax on super contributions (compared to 15%).
- Pension Balance Cap at $1.6mil: members can have a maximum balance of $1.6mil in pension mode (with earnings on these being tax free in the fund), with the balance to remain in accumulation mode (earnings on these being taxed at 15%).
- Super Contribution Deductions: contributions can be paid directly into super by individuals and claimed it their personal tax returns.
- Transition to Retirement Pensions: previously if individuals were over 60 years of age, these pensions would be tax free. From 1 July 2017, these earnings will be taxed at up to 15%.
- Small Business Capital Asset Write Off: the government will extend the current instant asset write off of $20,000 for small business (under $10mil turnover) to 30 June 2018
- Small Business Turnover Limit: the 2016/17 threshold is currently $10mil, but will increase to $25mil from 1 July 2017, allowing more business’ to be classified as Small Business, and access tax concessions (subject to approval from House of Reps).