CHANGES TO PRIVATE HEALTH INSURANCE OFFSET.

From the 1st July eligibility for this offset will be means tested. This offset will only be available to singles with adjusted taxable income below $130,000.00 and families with income below $260,000.00.

MEDICARE LEVY SURCHARGE.

The Medicare levy surcharge for persons above the income thresholds listed above, without qualifying private health insurance, has increased from 1% progressively to 1.5%.

FIRST HOME SAVERS ACCOUNTS ABOLISHED.

The First Home Saver Accounts (FHSA) were abolished on 1 July 2015 and became ordinary savings accounts. Account holders must include earnings in their tax returns. Account providers don’t pay tax on FHSA earnings for any period after 30 June 2015.

BUSINESS SERVICES WAGE ASSESSMENT TOOL PAYMENT.

If an individual received a lump sum in arrears business services wage assessment tool (BSWAT) payment, they may claim a lump sum in arrears tax offset. The BSWAT lump sum in arrears payment is not salary and wages or an Australian government pension or allowance. To claim the lump sum tax offset, they must report the payment at label 14 Other Australian income on their tax return. For more information visit: The BSWAT payment scheme.

INSTANT ASSET WRITE-OFF.

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30pm on 12 May 2015 and 30 June 2017. They can claim the deduction through their tax return. They can also immediately deduct the balance in the small business pool if it is less than $20,000 at the end of an income year ending on or after 12 May 2015 to 30 June 2017 (including an existing pool).

TAX CUTS FOR SMALL BUSINESS.

The small business company tax rate reduced from 30% to 28.5% for income years commencing on or after 1 July 2015. This lower rate also applies to small businesses that are corporate unit trusts and public trading trusts. The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate. The company tax rate remains at 30% for all other companies that are not small business entities.

SMALL BUSINESS INCOME TAX OFFSET.

From 2015–16, an individual is entitled to a tax offset of up to $1,000 on the tax payable on their total net small business income, which is their: net small business income from sole trading activities, share of net small business income from a partnership or trust. Eligible individuals need to work out their total net small business income. We will work out their offset based on the total net small business income reported in their income tax return.

IMMEDIATE DEDUCTIONS FOR START-UP COSTS.

As of 1 July 2015, small businesses can immediately deduct a range of start-up expenses, including professional, legal, and accounting advice and government fees and charges.

INCREASING ACCESS TO COMPANY LOSSES.

At the time of publishing, this had not become law. On 7 December 2015, the government announced, as part of its National Innovation and Science agenda, that the current ‘same business test’ for company losses will be relaxed to allow businesses to access past year losses when they have entered into new transactions or business activities. A new ‘predominately similar business test’ will be introduced where companies will be able to access losses where their business is similar in regard to: the extent to which the company generates assessable income from the same assets and sources, whether any changes to the business are changes that would reasonably be expected to have been made to a similarly placed business. This measure is expected to take effect from 1 July 2015.

New tax system for managed investment trusts.

The Managed investment trusts (MITs) have access to a new tax system, which modernises the tax rules for eligible MITs and increases certainty for investors. If enacted, the proposed rules will apply from 1 July 2016. Eligible MITs can elect to apply the rules from 1 July 2015. They can attribute trust income to beneficiaries on a fair and reasonable basis according to their ownership interests in the MIT. An eligible MIT electing into the system is known as an attribution managed investment trust (AMIT). Among other things, the new tax system introduces provisions relating to amounts that affect the cost base of a member’s interest in the trust.