Taxbridge

What's New

How will the 2011 Budget affect small business?

·       Trust distributions to Minors: Small businesses trading through a trust structure will be affected if they make distributions to minors (persons under 18).  In the past, due to the low income rebate, it was possible to distribute $3,000 to each child under 18 tax-free.  From the 2012 tax year, this benefit has been removed, only $445 will be able to be distributed tax-free.

·       Fringe Benefits: Amendments to the fringe benefits tax regime means that the statutory formula will be a single 20% rate regardless of the distance that the vehicle has travelled (subject to phasing in).

·       Entrepreneur Tax Offset: In the year ending 30th June 2013, business will lose the Entrepreneurs Tax Offset which currently allows an eligible small business a tax offset equal to 25% of their tax liability.

·       Immediate Deduction limit: From 1st July 2012 small business will be able to claim up to $5,000 as an immediate deduction for the purchase of a Motor Vehicle & and an immediate deduction of all depreciating assets acquired with a cost under $5,000 (currently $1,000).

These are highlights of the many changes made in the 2011 Budget. If you have any queries regarding the 2011 Budget, please contact the Taxbridge team.

 Pension - Minimum draw down relief

·       Due to the impact of the global economic downturn, the government has extended the 50% reduction in the minimum draw down requirements for allocated and market linked income streams to 30th June 2011. 

Centrelink's Treatment of Winnings

·       If a prize from a lottery ticket or scratchie is paid as a regular payment not as a lump sum, income will be assessed on the amount received each period.  Please note that this is not income for Income Tax purposes.