With the Federal Budget handed down last night in Canberra, there are a number of key changes which include:
- The income tax threshold at which the 37% tax applies will increase to $87,000 pa on 1 July 2016, from the current $80,000 pa.
- The tax rate that applies to small business companies will reduce to 27.5% for businesses with a turnover up to $10 million in 2016/17.
Further tax concessions will apply in future financial years.
- A range of superannuation measures will also apply from 1 July 2017.
- A lifetime limit of $1.6m will be placed on the amount of superannuation that can be transferred to start pensions.
- A lifetime cap on non-concessional (after-tax) superannuation contributions of $500,000 will apply from 7.30pm on 3 May 2016.
- The annual cap on concessional (pre-tax) super contributions will reduce to $25,000, regardless of age.
- Those aged between 65 and 74 will be able to make super contributions regardless of whether they work or not.
- Tax deductions will be able to be claimed for personal contributions regardless of employment status.
- Earnings on investments held in ‘transition to retirement’ pensions will be taxed at 15% (currently 0%).
We have prepared the below video summarising the changes. We have also attached a 2016 Federal Budget Summary (Click Here) (PDF 533kb) for your reading.
Please note – the information contained on this page is general information only and you should seek professional advice before proceeding.