Stay on top of the 1 July changes and how they may effect you…

Individuals

Personal tax bracket changes

The top threshold of the 32.5% personal income tax bracket will increase from $87,000 to $90,000*.

Introduction of the Low and Middle-Income Tax Offset*

providing a tax offset for those with taxable income of up to $125,333.

GST on property developments and residential subdivisions

The way GST is collected on sales of newly constructed residential properties or new subdivisions will change from 1 July. Purchasers will be required to remit the GST directly to the ATO as part of the settlement process. If you are buying a property, it is essential that you check the details to ensure that these new requirements have been managed (see this issue in Business also).

Business

Single touch payroll

New business reporting obligations starts soon!

  • 20 or more employees at 1 April 2018?
    • You must report payments such as salaries and wages, PAYG withholding and superannuation from 1 July 2018 using standard business reporting-enabled software
  • 19 or less employees?
    • Single touch payroll is expected to be compulsory for businesses from 1 July 2019.

The $20k instant asset write-off for small business has been extended

until 30 June 201.

GST on low value goods

GST will apply to overseas sales of goods supplied to Australian consumers with a value under $1,000.

GST on property developments and residential subdivisions

The way GST is collected on sales of newly constructed residential properties or new subdivisions will change from 1 July:

  • Vendor will no longer collect and remit GST on the purchase price of the residential premises
  • Vendor must notify the purchaser in writing that the GST needs to be paid to the Commissioner, and
  • Advise amount that must be paid – generally 1/11th of the contract price.
    • Margin Scheme Used: 7% of the contract price
    • Where transaction is between associates, it is 10% of the GST-exclusive market value.

NB: Notification rules will also apply to the vendor, even if the transaction does not trigger a GST liability.

R&D changes*

The way the R&D tax incentive is managed will change with caps introduced on cash rebates and for large companies, a refocussing of R&D to high intensity R&D activities.

Changes to the Wine Equalisation Tax

The rebate cap will reduce from $500,000 to $350,000 and the eligibility criteria tightened.

Superannuation

Event based reporting for SMSFs

A new reporting regime commences for SMSFs – called TBAR.

All SMSFs must report events that affect their members’ transfer balance accounts, for example:

  • When an SMSF member first starts to receive a pension from their fund, or
  • Takes a lump sum from pension account

If all members have a total superannuation balance of less than $1 million

Report to ATO when lodging annual tax return

In any member of SMSF have a balance of $1m or more

Report to ATO within 28 days after the end of the quarter in which the event occurs.

Carry forward concessional contributions

People with super balances below $500,000 will be able to rollover their unused concessional caps for up to 5 years. Unused cap amounts can be carried forward from the 2018-19 financial year; which means the first opportunity to use these new rules will be 2019-20.

Downsizer contributions

If you are over 65, have held your home for 10 years or more and are looking to sell, you might be able to contribute up to $300k of the proceeds from the sale of your home to superannuation.

First home saver scheme

First home savers are able to withdraw voluntary (after-tax) superannuation contributions they have made, to put towards their first home.

Changes to protect employees against inadvertent breaches of concessional caps*

Individuals whose income exceeds $263,157 and have multiple employers will be able to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG).

*Change has been announced but has not become law at the time of writing.