28/10/2022
Hi Followers,
Please see our tax summary of the 2022-23 October Federal Budget.
On Tuesday 25th of October 2022, treasurer Jim Chalmers handed down the 2022-23 October Federal Budget. Tax Related measures announced:
Individual Tax Returns:
▪️ There have been no changes to personal tax rates for 2022-23. The stage 3 personal income tax cuts remaining unchanged and will commence in 2024-25 as already legislated.
▪️ No extension was announced of the low and middle income tax offset (LMITO) to the 2022-23 income year. The LMITO has now ceased and been fully replace by the low income tax offset (LITO). As a result, low-to-middle income earners may see their tax refunds reduce by between $675 and $1,500 (for incomes up to $90,000 but phasing out up to $126,000).
▪️ Low income tax offset (LITO) remains unchanged in the 2022-23 October Budget. The LITO will continue to apply to the 2022-23 income year and beyond. The LITO was intended to replace the former low income and middle income tax offset from 2022-21, but the new LITO was brought forward in the 2020 Budget to apply from the 2020-21 income year.
General:
▪️ Digital Currencies not a foreign currency the Government is to introduce legislation to clarify that digital currencies (such as Bitcoin) continue to be excluded from the Australian income tax treatment of foreign currency. Please contact us if you have digital currency and how it affects you for tax purposes.
▪️ Off-market share buy-backs the Government intends to align the tax treatment of off-market share buy-backs undertaken by listed public companies with the treatment of on-market share buy-backs.
▪️ Penalties increased – the Government will increase the penalty amount for failure to lodge on time and meet other tax obligations from $222 to $275 from 1 January 2023.
Superannuation:
▪️ SMSF audits every 3 years the Government will not proceed with the former government's proposal to allow a 3- yearly audit cycle for SMSFs with a good compliance history.
▪️ Retirement income products the Government will not proceed with the proposal to report standardised metrics in product disclosure statements.
Other Measures
▪️ Affordable housing measures the Government will establish a Regional First Home Buyers Guarantee Scheme and a Housing Australia Future Fund.
▪️ Housing Accord struck between State and Territory governments and investors, including super funds, targeting 1 million new homes over 5 years from 2024. The Government will commit $350m over 5 years to deliver 10,000 affordable dwellings.
▪️ Paid Parental Leave (PPL) scheme to be expanded from 1 July 2023 so that either parent can claim the payment. From 1 July 2024, the scheme will be expanded by 2 additional weeks a year until it reaches a full 26 weeks from 1 July 2026.
▪️ Childcare subsidy (CCS) - maximum CCS rate to be increased from 85% to 90% for families for the first child in care and increase the CCS rate for all families earning less than $530,000 in household income.
Please note some of these announcements will undergo some in-depth rules and definitions so any doubt or concerns please contact our office.
For additional information please find a link to the October 2022-23 Federal Budget
Australian Federal Budget, October 2022-23
