The Federal Budget 2021-2022 outlines some tax changes on different areas, including individuals, business taxes and superannuation. Here are some main points that every taxpayer should know
Individual Tax
The maximum non-refundable Low-Middle Income tax offset in 2021-2022 will be extended.
The government planning to remove the self-education expenses first $250 threshold after the date of Royal Assent enabling legislation.
There will be a new simplifier residency rule to determine Australian tax resident status.
Business Tax
Instant Asset write-off for asset first used or installed ready from 12th March 2020 to 30th June 2021 (for business with aggregated turnover <$500 million). This policy also extended until 30th June 2023 for eligible assets acquired after 6th October 2020 and first used and installed by 30th June 2023.
For business less than $5 billion turnover can carry back tax loses incurred in an eligible year against taxed profits in a previous year until 2022-23 financial year.
The corporate tax rate for base rate entity will be 26% for financial year 2020-2021 and the tax rate for base rate entity for financial year 2021-2022 will be 25%.
Superannuation
Self-managed Super Funds (SMSF) members who live overseas can have a two-year window to manage their funds while temporarily living overseas. The active member test will be removed to enable members from overseas to contribute to their fund.
The tax relief for merging super funds now become permanent.
The government announce to reduce eligible age to make downsizer contributions into superannuation from 65 years of age to 60 years of age.
The super guarantee percentage will be 10% for FY2021-2022, and 0.5% increase per year until FY2025-2026.