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What A Coalition Win Means For You

The Coalition has won the federal election, which means we will not see the light of day on the following Labor Party’s tax proposal for at least 3 years;

  • No cash refunds of excess imputation credits
  • Limit negative gearing
  • Reduce the CGT discount from 50% to 25%
  • Tax discretionary trust distributions at 30%
  • $3,000 deduction cap on the cost of managing tax affairs

So what happens now?

The Coalition should be able to pass proposed bills to the house of representatives, but may have difficulty in passing the senate. Consequently, we thought it prudent to enlighten you with a brief outline of what tax changes we can expect from the Coalition Government in the near future to get you better equipped for when they become law.

The tax changes may originate from the following;

  • Tax proposals in the recent federal budget and main tax changes summarised as below;
Tax Payer Proposal
Individuals
  • Increase low and middle tax offset from $530 to $1,080 from 1/7/18
  • Lower 32.5% marginal tax rate to 30% from 1/7/24
SMEs
  • Increase & expand the instant asset write-off (already in law)
  • Defer start date of proposed Div7A changes to 1/7/20
Large business
  • $1B to tax avoidance task force to ensure fair share of taxes are paid
Superannuation
  • Enable those approaching retirement to put more money into their superannuation ei. Limiting the satisfaction of the work test

  • Backlog of earlier proposals and unenacted Bills that lapsed when election was called such as;
    • Super guarantee opt out if more than one job and earn more than $263,157 per year
    • Super guarantee amnesty
    • No more main residence exemption for foreign residents
    • Increase SMSF members from 4-6
    • Abolish work test for people aged 65-74

 

  •  Proposals made in the election campaign
    • First home loan deposit scheme to help first home buyers with at least 5% deposit to compliment the current first home super saver scheme.

We are unsure all the above proposed by the Coalition Government will be introduced into Parliament, and even when introduced, whether they will pass both Houses of Parliament before they can become law. Either way, we trust the above tax summary equips you for when these changes become law.

If anything in this tax summary triggered your interest or you are a type of taxpayer that is likely to be affected by these possible changes, please do not hesitate to contact us.

Written for you by Emelia Afful

 

 

 

 

The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Published on June 4, 2019 by Progue

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