2015 Budget Update & Year - End Tax Strategies

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    18-Aug-2015

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  1. 1. 2015 Budget Update & Year-End Tax Strategies
  2. 2. Overview 2015 Budget Tax Strategies Q & A
  3. 3. 2015 Budget - Small Business Accelerated depreciation for assets up to $20,000. Start Ups, immediate deduction for professional expenses, to establish a new business. From 1 July 2015, Company Tax rate to reduce from 30% to 28.5%. Unincorporated entities will receive a 5% discount on tax, up to a maximum of $1,000. From 1 July 2016, taxpayers will receive relief from Capital Gains Tax when changes are made to its structure.
  4. 4. 2015 Budget - Other Business From 1 July 2017, foreign companies will pay GST on digital products. Netflix tax. Tax integrity measures will be imposed for multi-nationals that are shifting profits from Australia to low-tax countries. $
  5. 5. 2015 Budget - Superannuation There were no changes to superannuation in the 2015 Budget. In response to the Tax White Paper and Murray Financial System Inquiry changes to superannuation are expected, in the future. Under review Borrowing in Self-Managed Superannuation Funds. Limitations on tax-free pensions for wealthy retirees. $ $ $ $
  6. 6. 2015 Budget - Individuals Individuals Tax Rates Residents 2015/16 & 2016/17 Threshold Marginal Tax Rate 1st rate $18,200 19.0% 2nd rate $37,001 32.5% 3rd rate $80,001 37.0% 4th rate $180,001 47.0%
  7. 7. 2015 Budget - Aged Pension Social Security Assets Test Current 20 Mar 2015 to 31 Dec 2016 Home Owners Non-Home Owners Full pension: single $202,000 $348,000 Full pension: couple $286,000 $433,000 No pension: single $775,500 $922,000 No pension: couple $1,151,500 $1,298,000 * Pension phased at $1.50 per $1,000 over the thresholds.
  8. 8. 2015 Budget - Aged Pension Social Security Assets Test Proposed From Jan 2017 Home Owners Non-Home Owners Full pension: single $250,000 $450,000 Full pension: couple $375,000 $575,000 No pension: single $547,000 $747,000 No pension: couple $823,000 $1,023,000 * Pension phased at $3.00 per $1,000 over the thresholds.
  9. 9. 2015 Budget - Child Care Annual Family Income % of Child Care Fees Subsidised Up to $65,000 85% Up to $170,000 50% $185,000 and above Capped at $10,000 per child, per year Applicable from 1 July 2017. Single child care subsidy will be introduced to replace existing three subsidies. New subsidy will be means tested and based on an activity test/hours worked.
  10. 10. 2015 Budget - Child Care Hours Worked Per Fortnight Hours of Child Care Subsidised 8 to 16 36 17 to 48 72 49 or more 100 Work Activity Test
  11. 11. Year-End Tax Strategies Accelerated asset depreciation up to $20,000. Superannuation contributions. Timing strategies... Prepayment of business expenditure. Deferral of customer invoicing. Delay sale of profitable assets. Bring forward assets with losses.
  12. 12. Year-End Tax Strategies Re-value trading stock. Lower stock >>> Lower taxable income = Less tax. Write off bad debts. $
  13. 13. Structural Tax Changes A growing business may require a change in its structure to manage tax liabilities. Options Discretionary trusts Private companies Self-Managed Superannuation Funds for investment assets, including business property. From 1 July 2016, small businesses can change their structure without triggering Capital Gains Tax. Possible to restructure without paying capital gains tax but stamp duty will apply to value of assets transferred.
  14. 14. Summary The 2015 Budget changes benefit small business owners. Take advantage of tax savings before 30 June 2015. Consider if your business structure is still appropriate? Consider the benefits of having a Self-Managed Superannuation Fund?
  15. 15. Questions