Raj’s Tax Tips & Federal budget 2017- Updates

What attracts the ATO’s attention?


  • Tax or business performance which is not similar to businesses in your industry
  • Low transparency in tax affairs
  • Large one off transactions or wealth shifting
  • A history of aggressive tax planning
  • Income declared which is not consistent with lifestyle expenses
  • Treating private assets as business assets
  • Poor governance management and record keeping

Federal budget 2017- Updates

  • No deduction for travel expenses for residential rental properties
  • From 1 July the Government will disallow deductions for travel expenses related to inspecting , maintaining of collecting rent for a residential rental property.
  • Extending the $20,000 write off for small business
  • The government has proposed to extend the $20,000 immediate write off for small businesses for 12 months until 30 June 2018 for businesses with turnover less than $10 million.
  • Audit funds for cash economy –The Government will provide $32 million for one year of additional funding for programs to expose the cash economy.
  • HECS threshold – From 1 July 2018 a new minimum threshold of $42,0000 will be established with a 1% repayment rate.
  • Medicare levy to increase to 2.5% from 1 July 2019
  • No changes to rules around work-related deductions
  • New scheme to allow first home buyers to make voluntary contributions to superannuation to be used to fund a home deposit
  • Restriction on depreciation deductions for plant and equipment installed by previous property owners
  • Removal of the main residence CGT exemption for foreign and temporary residents

Family Tax Benefit – Cuts to unimmunized children

From 1 July 2017, Family Tax Benefit Part A supplement payments will be reduced by $28 per fortnight for each child who does not meet the Government immunization requirements.

Superannuation incentives for elderly down-sizers

From 1 July 2018, if you are aged 65 or over, you will be able to make a non-concessional contribution of up to $300,000 from the proceeds of selling your home. These contributions will be in addition to those currently permitted under existing rules and caps and they will be exempt from the existing age test, work test and the $1.6m total superannuation balance test for making non-concessional contributions (which applies from 1 July 2017).

The measure will apply to sales of a principal residence owned for the past 10 years or more. Both members of a couple will be able to take advantage of this measure for the same home.

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