This is a short summary of The Budget for the 2012-13 financial year.
Benefits to Businesses
Helping business to invest
• Allowing companies to carry back tax losses so they get a refund against tax paid in the previous year, providing a tax benefit of up to $300,000 per year
• From 1 July 2012, delivering tax breaks for small business, like the increase to the instant asset write‑off threshold to $6,500
Building a more productive workforce
• $1.75 billion National Partnership Agreement on Skills Reform as agreed with COAG in April this year
• Investing an additional $225.1 million in Jobs, Education and Training Child Care Fee Assistance
• An additional $101 million of new skills measures to improve quality and better support mature age workers
Building productivity by investing in nation building infrastructure
• Investing $3.6 billion to duplicate the Pacific Highway by 2016, conditional on agreement with the NSW Government
• $350 million per year for the Roads to Recovery program
• $232 million towards the Torrens and Goodwood rail project in Adelaide
Capital Gains Tax
• Changes will be made to the application of the scrip-for-scrip roll-over and small business concessions to trusts, super funds and life insurance companies.
• The revenue asset and trading stock roll-overs that apply to the exchange of interests in a company or unit trust for shares in another company will be broadened.
• The CGT scrip-for-scrip roll-over integrity provisions will be strengthened.
• CGT: temporary loss relief will be made available to facilitate super reforms.
• Minor extensions to the CGT exemptions for certain compensation payments and insurance policies will be made.
• Minor amendments to natural disasters CGT relief will be made.
• CGT: refinements to income tax law for deceased estates will be made
• The personal income tax rates and thresholds that apply to non-residents’ Australian income will be adjusted.
• The CGT discount for non-residents will be abolished for gains accrued after 7:30pm (AEST) on 8 May 2012.
• The managed investment trust final withholding tax rate will be increased from 7.5% to 15% from 1 July 2012.
• The start date of the 2010/11 Budget measure increasing concessional contribution caps for individuals over 50 with low superannuation balances will be deferred by two years, from 1 July 2012 to 1 July 2014.
• From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions reduced from 30% to 15% (excluding the Medicare levy).
• From 1 July 2012, the employment termination payment (ETP) tax offset will be limited so that only that part of an affected ETP, such as a golden handshake, that takes a person’s total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset.
Goods & Services Tax
• Funding for additional GST compliance activities will be extended for a further two years until 2015/16.
• Minor changes affecting cross border transactions will include a clarification of the definition of permanent establishment for GST purposes.
• The operation of the GST law in relation to the mortgage lending sector will be clarified to reduce compliance costs.
• From 1 July 2011, access to reduced input tax credits (RITC) will be restored for credit unions who rebrand as “banks”.
• Health supplies by a health care provider paid for by a statutory compensation scheme operator will be GST-free if the underlying supply from the health care provider to the individual is also GST-free.
• From 1 July 2012, a regulation-making power will allow certain payments between government-related entities to be prescribed as not being subject to GST.
• Additional funding
– $76.8m for the Tax Office and other Project Wickenby agencies.
– provided for the Tax Office to manage tax debt.
• From 1 July 2012, the wine producer rebate will be amended to ensure that wine producers will not be able to claim multiple rebates for the same quantity of wine, beyond the total amount of wine equalisation tax payable.
As a result of this Federal Budget, there are many changes that are set to take place over the next few financial years. For more information about how anything in the 2012 Budget may affect you or your business, or for any other tax or accounting related queries please contact the team of accountants and tax agents at The Quinn Group. Submit an online enquiry for more information, or call us on 1300 QUINNS (1300 784 667) or +61 2 9223 9166 to book an appointment.