We’re into a new calendar year, and with that comes the time to reflect on the last year as well as what’s on the agenda for 2015. There have been no real developments in the past month due to the Christmas & New Year holiday period. Federal Parliament is in recess until early February.
Instead, we’ll get our crystal ball out and gaze ahead to try and predict what is in store for us in 2015.
We are all well aware by now of the Federal Budget handed down last May and it’s severe spending cuts. However, what you may not be aware of is that only a few of the measures have actually been enacted into law. It’s almost impossible to keep track of where each of these announcements are in the process, so below is a quick summary of the key measures announced last May:
Carbon Tax - this has been successfully abolished.
Mining Tax - this has also been successfully abolished. Along with this action came the removal of business initiatives such as the loss carry back rules for companies, as well as accelerated depreciation for motor vehicles.
2% ‘Debt Tax’ - This applies from 1 July 2014 - 30 June 2017 for people with an annual taxable income greater than $180,000.
GP Co-Payment - This has been defeated in the Upper House of Parliament.
Superannuation Guarantee - This has been altered along with the mining tax rules. The rate will now be 9.5% until 1 July 2021.
With regard to tax, the government’s Tax ‘White Paper’ is due out shortly. It is a formal review of our entire tax system and is expected to outline that major changes are required. It is likely to be suggested that the government needs to move away from reliance on personal and corporate tax and instead broaden the base and increase the rate of GST. This is a hugely controversial topic, so it’ll be an interesting space to watch!
As mentioned above, the superannuation guarantee rate has been set in stone at 9.5% until at least June 2021. This helps to give employers certainty around their obligations. Of course, this could be altered as early as the next Federal Budget in May 2015.
Another significant development is the reform of excess contributions tax. At present it’s currently before Parliament, with a positive outcome expected early in 2015. Once passed, it will allow for the withdrawal of any excess non-concessional contributions. This will help to avoid any excess contributions tax on amounts paid into the fund by mistake.
The crackdown on SMSFs will continue in 2015. If your retirement savings are located within this environment, take extra care to ensure you are complying with the rules. Key issues include:
Interactions with related parties
Overseas members & residency
As always, if you would like any further information on anything included here, or need tax advice for any matter, don’t hesitate to contact the Interactive Accounting team.