There are a number of new taxes and associated changes that come into play on the 1 July 2012. One major reason behind these new regulations is the desire by the present government to bring the budget back into surplus in 2012/2013.
Some of the important changes are summarised below:
Dependent Spouse Rebate
From 1 July 2012, the dependent spouse rebate will be phased out. A taxpayer will no longer be able to claim the tax offset for a dependent spouse born after 1 July 1952. However, taxpayers with an invalid or permanently disabled spouse, or who is a carer, will not be affected by this change.
The proposal to claim an automatic deduction of $500 on a tax return without receipts or the usual rules of substantiation from 1 July 2012 and $1,000 from 1 July 2013 will be deferred for a year to start on 1 July 2013 and 1 July 2014 respectively.
Tax Relief on Savings Accounts
The proposal to provide a 50% tax relief for savings accounts earning less than $1,000 in interest per annum will also be deferred until 1 July 2013. The government has also indicated that it will consult more widely before this is fully implemented.
Car Fringe Benefit Rules
The government announced in the budget that it would introduce a flat 20% as the statutory rate (instead of the multiple rates that currently applies) when calculating the taxable value of a car fringe benefit. The government has also indicated that it will allow employers to introduce the new rate to any new contracts rather than apply the transition rules, although it stipulates that this must be done in consultation with employees.
FBT Living Away from Home Allowance
From 1 July 2012, access to the tax exemption for temporary residents will only be made available if the person maintains a residence in Australia and is living away as a result of work. Consultation about transitional arrangements is currently occurring.
Baby Bonus Indexation
From 1 July 2012, the baby bonus payment will be held constant at $5,000 per child for the next three years, and will continue to be paid in 13 fortnightly instalments.
Family Tax Payments (FTB) Part A
Also from 1 July 2012 the government will make payment of the FTB part A supplement conditional on a child being fully immunised. These arrangements will replace the Maternity Immunisation Allowance.
Low Income Superannuation Contribution
Taxpayers with an adjusted taxable income of up to $37,000 will receive a low income superannuation contribution up to a maximum of $500. The minimum payment is $20. Only individuals who receive at least 10% of their income from employment or business will be eligible and temporary residents are ineligible.
The co-contribution will reduce from $1,000 to $500. The matching rate remains at $1 for $1 and eligibility for the co-contribution cuts out at $46,920 (currently $61,920).
Abolition of Age Limit
From 1 July 2013, employers will be required to make compulsory superannuation guarantee (SG) contributions for all employees. Currently they are not required to make SG contributions to employees age 70 and over.
These are some of the changes that are expected to take effect from 1 July 2012. It is important to be aware of these rules as they impact on your ability to claim deductions and to ensure you do not pay extra tax, such as when your concessional contributions to your superannuation fund exceeds $25,000 per annum.
If you wish to know more about any of these changes and its effect on your tax affairs, call us on 02 9587 2225 for a discussion of how we can assist you to minimise your tax, and more importantly, provide you with continuing advice to minimise tax into the future while building up your wealth.