We regularly publish brief notes of advice/comments on tax topics plus related matters in “dot point” format for you to skim through and consider. Hopefully these will be of interest to you:

  • Company tax rate reduction from 30% to 28.5%, effective 1 July 2015, was announced in the budget.
  • The highest marginal tax rate is being increased by 2.0% for what is described as a “temporary (3 year) budget repair levy” and with the increased Medicare levy those earning over $180,000 will pay 49%!
  • The Medicare levy is being increased to 2.0% from 1 July 2014 to fund the National Disability Insurance Scheme.
  • The medical expense rebate is being phased out by 2015 – only available in 2014/2015 to those taxpayers who claimed in 2012/2013.
  • Superannuation guarantee charge increase from 9.25% to 9.5%, effective 1 July 2014, was also announced in the budget.
  • Employers who engage contractors where the contract is wholly or principally for the contractor’s labour are still required to make superannuation guarantee payments on behalf of the contractor, even though he or she may quote an Australian Business Number (ABN).
  • Overnight work related travel within Australia – a travel diary is only required for extended travel (more than five continuous nights) where the travel is not undertaken exclusively for employment purposes – i.e. there is a private use element to the travel.
  • Overnight work related travel overseas – a travel diary is required where travel is for more than five continuous nights.

     (In both cases written evidence of airfare and accommodation costs are nevertheless required.)

  • Borrowers with tax deductible interest may pre-pay up to twelve months’ interest and claim a deduction for the pre-payment (available to small business entities and non-business individuals).
  • The ‘two year’ CGT rule in respect of dwellings bequeathed is measured from the date of death to the date the beneficiary ceases to legally own the dwelling – i.e. the date of settlement not the date the sale contract is signed! This contrasts with the CGT position on acquisition or disposal of investments where the contract date is the relevant date for CGT purposes and not the date of settlement!
  • The ‘two year’ rule, if exceeded, is no longer applicable; it is not pro-rated!