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2013

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Tax planning 2012-2013

Tax planning 2012-2013

The following were the main items announced in the most recent Federal Budget which might affect you in the current 2013 financial year.

TAXATION OF ETP TAX OFFSET

The Government will limit the availability of the ETP offset from 1 July 2012. Only the part of an affected ETP that takes a person’s total annual taxable income (including the ETP) to no more than $180,000 will receive the EIP tax offset.

INCREASED FAMILY TAX BENEFIT

From 1 July 2013 Family Tax benefit Part A will increase for all eligible families. For families on the base rate the increase will be $100 for families with one child and $200 for families with two or more children. For those on the maximum rate the increase will be $300 for families with one child and $600 for families with two or more children..

TRIPLING THE TAX FREE THRESHOLD

The Government has announced that the tax-free thresholds will triple from the current $6,000 to $18,200, effective as at 1 July 2012. Therefore, all taxpayers with income under $80,000 will receive the cut. The tax-free threshold will further rise to $19,400 in 2015-16.

SCHOOLKIDS BONUS TO REPLACE EDUCATION TAX REFUND

The Schoolkids Bonus will replace the Education Tax Refund from 1 July 2012, and the families that are eligible for the refund will receive the full education tax refund amount in July 2012 as a transitional arrangement.

The bonus will be made in two equal instalments in January and July each year commencing January 2013. Every family with a child at school will be guaranteed $410 per annum for each primary school student and $820 per annum for each secondary school student. There will be no longer the need to keep receipts as proof of expense, or wait until tax time.

CHANGES TO TAX RATES FOR NON-RESIDENTS

The Government will adjust the personal income tax rates and thresholds that apply to non-residents’ Australian income to a higher rate compared to the current year, applying from 1 July 2012.

REMOVAL OF THE CGT DISCOUNT FOR NON-RESIDENTS

The Government will remove the 50% CGT discount for non-residents on capital gains accrued after 8 May 2012. The CGT discounts will remain available for capital gains accrued prior to this time where non-residents choose to obtain a market valuation of the assets as at 8 May 2012.

CONSOLIDATING THE DEPENDENCY OFFSETS INTO ONE

The Government will consolidate eight dependency tax offsets into a single streamed lined and non-refundable offset that is only available to taxpayers who maintain a dependant who is genuinely unable to work due to carer obligation or disability.

The offsets to be consolidated are the:
Invalid spouse
Carer spouse
Housekeeper (with child)
Child-housekeeper
Child-housekeeper (with child)
Invalid relative and
Parent/parent-in-law tax offsets

The new consolidated offset will be based on the highest rate of the existing offsets it replaces, resulting in an increased entitlement for many of those eligible for this measure which will take effect from 1 July 2012.

MATURE AGE WORKER TAX OFFSET TO BE PHASED OUT

The Governemnt will phase out the mature age worker tax offset from 1 July 2012 for taxpayers born on or after 1 July 1957.

MEANS TESTING THE NET MEDICAL EXPENSES TAX OFFSET

The Government will introduce a means test for the net medical expenses tax offset (NMETO) to limit the amount of claims the taxpayer makes in the tax return, effective from 1 July 2012.

COMPANY LOSS CARRY-BACK

The Government has allowed companies to carry back losses for one year to in the 2012-2013 income year and two years for 2013-14 and later years. Companies will be able to carry back up to $1 million of losses each year, available to company’s revenue loss only and limited to a company’s franking account balance.


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