Key Points from the Federal Budget 2016-2017
Federal Treasurer Scott Morrison’s Budget raises a number of potential changes that will be important to both individuals and businesses, writes Adelaide accountant Todd Bond.
Federal Treasurer Scott Morrison’s Budget raises a number of potential changes that will be important to both individuals and businesses.
The highlights from the Federal Budget 2016-2017 include:
- A wide-ranging Superannuation Reform Package which includes, among many other things:
- Removal of the tax exemption on earnings of assets supporting Transition to Retirement income streams from 1 July 2017 (irrespective of when the income stream commenced);
- A $500,000 lifetime cap for non-concessional superannuation contributions, commencing from 3 May 2016;
- A $1.6 million cap on the total amount of accumulated superannuation an individual can transfer into the retirement phase, from 1 July 2017;
- An increase in the small business entity turnover threshold from $2 million to $10 million from 1 July 2016 - unless you are looking for access to the small business CGT concessions, in which case the threshold will stay at $2 million, or access to the unincorporated small business tax discount, in which case the threshold will increase to only $5 million;
- A progressive reduction in the company tax rate to 25% over the next ten years - it will not reduced to 25% until 2026-27;
- Targeted amendments to Div 7A will apply from 1 July 2018, including having a single compliant loan duration of ten years, and better aligning calculation of the minimum interest rate with commercial transactions;
- An increase to the 32.5% personal income tax threshold from $80,000 to $87,000 from 1 July 2016.
This is just a snapshot of the key issues arising from the Federal Budget. If any of the above applies to you, or you have other questions or concerns about your circumstances, it is crucial to seek expert advice.
To arrange an appointment with Wallace Vroulis Bond, contact us.