Federal Budget 11 May 2021 tax measures

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Category Budget measure
Covid-19 economic response

Key Federal Government tax or grant related programmes forming a part of the economic response are:
  1. First home owners loan deposit scheme and super saver scheme;
  2. Family home guarantee for single parents;
  3. Business support for new apprentices and trainees;
  4. Targeted industry support;
  5. Covid19 vaccines available to the public; and
The total economic support is approximately $53b billion.
Individuals
  1. A new tax residency primary test for persons present for 183 days or more. Secondary tests will apply;
  2. The low and middle-income tax offset (LMITO) of $1,080 for individuals and $2,160 for couples will remain in place for a further year for taxable income up to $126,000;
  3. Removal of $450 per month minimum income amount for the superannuation guarantee;
  4. Medicare levy threshold increase to $23,226 for singles and families to $39,167; and
  5. Removal of exclusion of first $250 for education courses.
Families
  1. The low and middle-income tax offset (LMITO) of $1,080 for individuals and $2,160 for couples will remain in place for a further year;
  2. First home owners loan deposit scheme and super saver scheme;
  3. Family home guarantee for single parents; and
  4. Increased childcare subsidies.
Retirees & Pensioners
  1. Post-tax superannuation contribution of up to $300,000 per person over 60 years when their home is sold; and
  2. Work test to be repealed for persons aged 67-74 years to make or receive non-concessional contributions.
Small to Medium Businesses
  1. AAT to have a power to pause or modify ATO debt recovery for disputed debts being reviewed by the Small Business Taxation Division;
  2. For businesses up to $5b in turnover, losses in 2020-2021, 2021-2022 and 2022-2023 can be offset from profits in 2018-2019 and later tax years. The business can elect a tax refund when the tax return is lodged. If a franking deficit will arise, the loss carry back is limited to avoid the franking deficit;
  3. Until 30 June 2023, for businesses up to $5b in turnover, unlimited instant asset write-off of for eligible in-use depreciating assets (including 2nd hand assets). The deduction is claimable in the year the asset is in use; and
  4. 17% tax rate for medical and biotechnology innovations.
High Net Worth & Multinationals
  1. 17% tax rate for medical and biotechnology innovations.
SMSFs
  1. Post-tax superannuation contribution of up to $300,000 per person over 60 years when their home is sold; and
  2. Residency requirements to be relaxed to 2 years and removing the active member test.

Disclaimer: This webpage was last updated on 11 May 2021. The information in this document is provided for general information and reflects our understanding of the Federal Budget measures as at the date of publication from information provided. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on your specific circumstances.


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