HOW IT MAY EFFECT YOU
Individuals and families
- The government will not proceed with the standard deduction for work-related expenses.
- The 50% tax discount for interest income will not proceed.
- A means test will be introduced for the net medical expenses tax offset (NMETO) from 1 July 2012.
- For people with adjusted taxable income above the Medicare levy surcharge thresholds ($84,000 for singles and $168,000 for couples or families in 2012/13), the threshold above which a taxpayer may claim NMETO will be increased to $5,000 (indexed annually thereafter) and the rate of reimbursement will be reduced to 10% for eligible out of pocket expenses incurred.
- From 1 July 2012, the eight dependency tax offsets will be consolidated into a single, streamlined and non-refundable offset.
- From 1 July 2012, the mature age worker tax offset (MAWTO) will be phased out for taxpayers born on or after 1 July 1957.
- The Medicare levy low income thresholds will be increased to $19,404 for individuals and $32,743 for families for the 2011/12 income year.
- Exemptions for the temporary flood and cyclone reconstruction levy will be extended to individuals who were eligible for an Australian Government Disaster Recovery Payment in 2010/11 as well as certain individuals affected by a natural disaster in 2011/12.
- The education expenses tax offset will be replaced with a new Schoolkids Bonus from 1 January 2013.
- The education expenses tax offset will be replaced with a new Schoolkids Bonus of $410 pa for each primary school student and $820 pa for each secondary school student. The bonus will be paid to eligible families in two equal instalments in January and July each year. As a transitional arrangement for 2011/12, the education expenses tax offset will be paid out in full to eligible families in June 2012.
- From 1 July 2012, the marginal tax rate for non-resident individuals participating in the Seasonal Labour Mobility Program will be reduced to 15%.
Companies and finance
- The proposed measure to lower the company tax rate from 2013/14 and from 2012/13 for small businesses will not proceed.
- The Tax Breaks for Green Buildings program will not proceed.
- From 8 May 2012, limited recourse debt will include arrangements where the creditor’s right to recover the debt is effectively limited to the financed asset or security provided.
- Companies will be allowed to carry back up to $1m of tax losses in 2012/13 to offset against tax paid in 2011/12. From 2013/14, tax losses can be carried back and offset against tax paid up to two years earlier.
- The taxable value of airline transport fringe benefits will be updated from the stand-by value to the market value for benefits provided after 7:30pm (AEST) on 8 May 2012.
- Small Business will be able to write off assets up to a value of $6,500 each from 1 July 2012
- The write off of bad debts owing from related parties will not be deductible effective from 7:30pm (AEST) 8 May 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).
CGT discount for non-residents abolished
- The 50% CGT discount for non-residents will be abolished for capital gains.
- The CGT discount will remain available for capital gains accrued prior to this time where non-residents choose to obtain a market valuation of assets as at 8 May 2012.