Tax & The Federal Budget

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The Federal Budget dropped last week (14 May), with several key updates involving current measures, rebates and confirmation of the stage 3 tax cuts.

Energy Bill Relief Fund:

The Energy Bill Relief Fund is introducing a $300 rebate for households and a $325 rebate for eligible small businesses on their 2024-24 bills. This initiative extends the previous Budget’s Energy Price Relief Plan.

Extension of Instant Asset Write-Off:

Small businesses with an aggregated annual turnover of less than $10 million will retain the ability to immediately deduct the full cost of eligible assets costing less than $20,000 until 30 June 2025. This extension allows small businesses to instantly write off multiple assets, with assets valued at $20,000 or more being placed into the small business simplified depreciation pool.

Stage 3 Tax Cuts:

Effective from 1 July 2024, all taxpayers will benefit from tax cuts outlined by the federal government earlier this year. These reforms include reducing the 19% tax rate to 16%, lowering the 32.5% tax rate to 30%, increasing the threshold for the 37% tax rate from $120,000 to $135,000, and raising the threshold for the highest 45% tax rate from $180,000 to $190,000.

Strengthening of Foreign Resident Capital Gains Tax Regime:

The Government aims to enhance the foreign resident capital gains tax (CGT) regime to ensure equitable taxation for foreign residents in Australia. Amendments will come into effect from 1 July 2025, including clarifying and broadening the assets subject to CGT for foreign residents, transitioning to a 365-day testing period for the principal asset test, and requiring foreign residents to notify the ATO before executing transactions involving shares or other membership interests exceeding $20 million in value.

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