The Government has announced that the managed investment trust (MIT) final withholding tax rate will increase from 7.5% to 15%. This measure will return the withholding tax for MITs to the original level. The Treasurer said that the 15% rate is competitive with current rates applying in other countries, including the USA and Japan. Date…
The Government will clarify that limited recourse debt includes arrangements where the creditor’s right to recover the debt is effectively limited to the financed asset or security provided. This measure will ensure that tax deductions are not available for capital expenditure on assets that have been financed by limited recourse debt, to the extent that…
The Government will ensure that, on commencement of the Basel III capital reforms, certain capital instruments issued by authorised deposit taking institutions (ADIs) can be treated as debt for income tax purposes. This change will apply to certain Tier 2 regulatory capital instruments issued by ADIs and certain other related entities regulated by the APRA.…
The Government will ensure a more consistent tax treatment for bad debts between related parties irrespective of whether they are members of a tax consolidated group. This will be achieved by denying a tax deduction for a bad debt written off where the debtor is a related party not in the same tax consolidated group.…
The method of determining the taxable value of airline transport fringe benefits will be changed from stand-by value to market value. An airline transport fringe benefit may arise when an employee of an airline or travel agent is provided with free or discounted travel on a stand-by basis. The taxable value is currently the stand-by…
The Government announced that it would further reform the tax concession for living away from home allowances (LAFHA) and benefits by “better targeting it at people who are legitimately maintaining a second home in addition to their actual home for an initial period”. The changes would: limit access to the tax concession to employees who…
The Budget confirmed the Treasurer’s announcement on 6 May 2012 that the Government would allow businesses to carry-back losses. Mr Swan said the proposed changes would “allow businesses to ‘carry back’ their losses, to offset past profits and get a refund of tax previously paid on that profit”. The carry-back will be available to companies…
The Treasurer has announced that the proposed reduction in the company tax rate to 29% will not proceed. The reason given by the Treasurer was that it had become clear that the proposed tax rate cut would not be approved by Parliament. The Treasurer added that the savings from not proceeding with the company tax…
The medical expenses tax offset will be means tested from 1 July 2012. The Government announced that, 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 the medical expenses offset will be increased…
From the 2011-12 income year, the Medicare levy low-income thresholds will be increased for singles to $19,404 (up from $18,839 for 2010-11) and to $32,743 for those who are members of a family (up from $31,789 for 2010-11). The additional amount of threshold for each dependent child or student will also be increased to $3,007…