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2018 Federal Budget Update

On Tuesday evening the Federal Government handed down the 2018 Budget. While there were no notable surprises, there were a range of announcements which could be impactful depending on your circumstances.

KEY BUDGET MEASURES INCLUDE

 Low and Middle-income Tax Offset. From 1 July 2018, the government will introduce the Low and Middle-income Tax Offset, a non-refundable tax offset of up to $530 per annum.

 Reducing bracket creep. From 1 July 2018, the government will increase the top threshold of the 32.5% personal income tax bracket from $87,000 to $90,000. From 1 July 2022, the government will extend the 19% personal income tax bracket from $37,000 to $41,000.

 Removal of the 37% tax bracket – From 1 July 2024, the government will extend the top threshold of the 32.5% personal income tax bracket from $120,000 to $200,000 to recognise inflation and wage growth impacts, thereby removing the 37% tax bracket entirely.

 Work test exemption for recent retirees. From 1 July 2019, an exemption from the work test for voluntary contributions to superannuation will be available for people age 65-74 with a total superannuation balance of below $300,000 in the first year that they do not meet the work test requirements.

 Increasing member numbers in SMSF. From 1 July 2019, the maximum number of allowable members in new and existing self-managed superannuation funds will increase from four to six.

 Three-yearly audit cycle for some self-managed superannuation funds. From 1 July 2019, the annual audit requirement will change to a three-yearly requirement for self-managed superannuation funds with a history of good record-keeping and compliance.

To hear more we have prepared a short video from Intralink’s Head of Strategic Advice, Mark Serry who discusses some of the key measures from the budget in more depth.

It is important to note that the Budget announcements are still only proposals at this stage and will depend on the proposals being legislated in due course.

If you have any questions regarding the above, please contact your Adviser on (03) 9629 1100.

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