The Australian Government recently announced some important changes related to tax, claims & SMSF. We wanted to provide an update on what is happening and keep you in touch with future changes.
Legislation introduced to change GST arrangements on new residential properties
A Bill has been introduced into Parliament that, when passed, will require the purchasers of new residential premises and new subdivisions of potential residential land to pay the goods and services tax (GST) on the purchase directly to the ATO as part of the settlement process from 1 July 2018.
Under the current law, the supplier of the property (eg the developer) is responsible for paying the GST to the ATO when lodging a business activity statement (BAS). This can happen up to three months after settlement.
The new measure was announced in the 2017–2018 Federal Budget. It is intended to speed up the GST payment process, and to deal with the problem of some developers avoiding their GST responsibilities by liquidating their business and setting up a new entity.
The franking credit debate
The Labor party has announced that a Labor government would seek to close down a concession that gives cash refunds for excess dividend imputation credits, if elected.
Under the dividend imputation system, shareholders can use imputation credits to reduce their overall tax liability. A concession allows some individuals and superannuation funds to receive a cash refund from the ATO if their imputation credits exceed the tax they owe.
The Labor policy is intended to commence 1 July 2019.
Personal Superannuation Contributions
Many individual taxpayers are now eligible to claim a tax deduction for personal superannuation contributions that they make after 1 July 2017. Before this date, a taxpayer was only eligible if less than 10% of their income came from salary and wages.
Concessional contributions, which include an employer superannuation guarantee contribution as well as a taxpayer’s personal contribution for which they are claiming a tax deduction, are capped at $25,000 for all taxpayers. There had previously been a different cap amount for taxpayers aged over 50.
Tax Offset for Spouse Superannuation Contribution
Changes to the tax offset for spouse superannuation contributions came into effect from 1 July 2017 with an increase in the spouse income threshold from $10,800 to $37,000.
Taxpayers are eligible to claim the maximum tax offset of $540 if they contribute $3,000 to the eligible super fund of their spouse and, the assessable income plus reportable employer super contribution plus reportable fringe benefit amount is below $37,000.
Important Dates & Reminders
- 28 April 2018 – Employer quarterly superannuation contributions due.
- 28 April 2018 – March quarter activity statements due for lodgement.
- 15 May 2018 – due date for income tax return lodgement prepared by a tax agent.
- 30 June 2018 – extended lodgement date for lodgement of 2017 SMSF returns