2016 Federal Budget – what it means to you
As you know the Government released the 2016/17 Federal Budget with a number of proposed changes below. We will gain clarity on the proposed changes as new information and further detail becomes available to us. Once we have further clarity, we will contact you directly should we identify any actions or changes which need to be made.
Superannuation – better targeting of concessions
– Annual cap on concession contributions will reduce to 25,000 for all taxpayers
Age Annual cap amount
In 2015/16 and 2016/17 From 2017/18
48 or under on 30 June 2015 $30,000 $25,000
49 or over on 30 June 2015 $35,000 $25,000
– ‘Catch-up’ concessional contributions
– Additional tax on concessional contributions
Income Tax on concessional contributions
In 2015/16 and 2016/17 From 2017/18
<$250,000 15% 15%
$250,000 to $300,000 15% 30%
$300,000 + 30% 30%
Superannuation – better targeting of concessions
– Changes to non-concessional contributions – from Budget night
– LIfetime cap of $500,000
– Replaces existing annual caps
– All non concessional contributions made on or after
1 July 2007
– Superannuation pension limits – from 1 July 2017
– a balance cap of $1.6m on the total amount of accumulation
super that can be transferred into tax-free retirement phase
Superannuation – enhancing flexibility and choice –
from 1 July 2017
– Harmonising contributions between aged 65 and 74
– removal of work test
– open up the ability for spouses over 70 to receive contributions
– Restrictions on personal superannuation contribution deductions eased
– all individual up to age 75 will be allowed to claim an income tax
deduction for personal superannuation contributions
Superannuation – improving integrity – from 1 July 2017
– Transition to retirement pensions
– tax exemption on earnings of assets supporting Transition to
retirement income streams will be removed
– same taxation as accumulation superannuation to apply
(ie 15%)
– Anti-detriment death benefit provision removed
Personal tax rate changes
– Targeted personal income tax relief
Current tax Thresholds Tax rate New tax Thresholds Tax rate
2015/16 2016/17
$0 – $18,200 0% $0-$18,200 0%
$18,201 – $37,000 19% $18,201 – $37,000 19%
$37,001 – $80,000 32.5% $37,001 – $87,000 32.5%
$80,001 – $180,000 37% $87,001 – $180,000 37%
$180,000+ 45% $180,000+ 45%
Other personal tax rate changes
– Spouse superannuation tax offset
– Temporary Budget Repair Levy
Date of effect Measures Details
1 July 2017 Spouse superannuation – Spouse income threshold will
tax offset increase from $10,000 to
$37,000
– Maximum tax offset will
remain at $540
1 July 2017 Temporary Budget This levy, which is 2% of
taxable Repair Levy income in
excess of $180,000 will
expire on 30 June 2017
as legislated
Company tax rate
– Staggered cuts to the company tax rate
Maximum business turnover to be eligible for 27.5%
company rate
Tax Year 2016/17 2017/18 2018/19 2019/20
Turn Over $10m $25m $50m $100m
Tax Year 2020/21 2021/22 2022/23
Turn Over $250m $500m $1b
– Further company tax rate changes
Tax Year 2024/25 2025/26 2026/27
All Companies 27% 26% 25%
Measures not announced or affected
– Negative gearing
– Child care rebate
– Age Pension
Please don’t hesitate to contact our office should you have any queries. However we will be in contact once the changes have been finalised and if you will be affected.
Yours sincerely
Stevens Roberts Financial Planning Team
This presentation has been prepared by Greg Stevens CAR . Launce Kent and Corey Roberts, Trading in Partnership as Stevens Roberts Financial Planning (ABN. 04169074) ABN. 63 277 397 276 are authorised representatives of Meritum Financial Group Pty Ltd, ABN 93 106 888 215 an Australian Financial Services Licensee 245569, Registered Office at 105 – 153 Miller Street, North Sydney NSW 2060 and a member of the National Australia group of companies.
This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax and/or legal advice prior to acting on this information.
Information in this presentation is accurate as at 3 May 2016. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way.
Opinions constitute our judgement at the time of issue and are subject to change. We do not give give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.
Case studies in this presentation are for illustration purposes only. The investment returns shown in any case studies in this presentation are hypothetical examples only and do not reflect the historical or future returns of any specific financial products. Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns. A
ny tax information provided in this presentation is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or a complete assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.