March 4, 2019
Snapshot of the ALP key tax policies
Income Tax Reforms 1. Restrict deductions on personal tax-related expenses to a $3,000 cap per individual, per year (Ref: Shadow Treasurer's and Assistant Shadow Treasurer's joint media release, 13 May 2018)
2. Reduce the maximum general CGT discount from 50% to 25%, with exceptions for: grandfathered investments; investments made by superannuation; and assets of small business owners (Ref: 'A fair go for Australia', paragraph 135 and ALP website: Labor factsheet, 'Positive plan to help housing afforadbility')
3. Limit negative gearing to investments in new housing, with grandfathering for pre-existing investments. Labor has proposed any losses from new investments in shares and existing properties (which we assume includes commercial property) will still be permitted to be used to offset investment income tax liabilities (but not against salary and wages). Any deferred losses can then be carried forward to offset the final capital gain on the investment. (Ref: 'A fair go for Australia', paragraph 135 and ALP website: Labor factsheet, 'Positive plan to help housing affordability'
4 .Remove the ability for certain taxpayers to claim excess imputation credits as cash refunds. (Ref: Leader of the Opposition's media release, 13 March 2018)
5. Apply a minimum tax rate of 30% to all distributions from discretionary trusts (non-fixed trusts) to mature individual beneficiaries (i.e., those over 18) (Ref: 'A fair go for Australia', paragraph 131 and Leader of the Opposition's media release, 30 July 2017)
6. Introduction of an Australian Investment Guarantee from 1 July 2020. This accelerated depreciation for business proposes to immediately allow a 20% write-off for eligible depreciating assets. (Ref: Shadow Treasurer's media release, 13 March 2018)
Comparable Coalition Tax Policies
. 1. No cap on personal tax-related expenses has been proposed, although the ATO has made adjustments to Item D10 - Managing tax affairs to obtain a more detailed breakdown of what is being claimed by taxpayers at this label from the 2018 'I' returns.
2. The Coalition has not indicated a desire to change the current maximum general CGT discount from 50% for eligible taxpayers.
3. The Coalition has not indicated a desire to change the current negative gearing rules.
4. The Coalition has not indicated a desire to change the current ability for eligible taxpayers (including individuals an SMSFs) to receive cash refunds for excess imputation credits.
5. The Coalition has not indicated a desire to change the current rules in relation to the taxation of discretionary trust beneficiaries at their applicable marginal tax rate.
6. The Coalition has announced that from 29 January 2019, the instant asset write-off threshold for SBE taxpayers will increase to less than $25,000 and this rule will apply until 30 June 2020 (at which time the immediate write-off threshold presumably goes back to less than $1,000)
- 2018/19 Year-end Individual Tax Return Checklist
- ALP Key Tax Policies
- ATO warning regarding annual leave loading and OTE
- Fast-tracking tax cuts for small and medium businesses
- How financial advisors can build trust
- Instant asset write off to be increased to $25k
- Major changes to director penalty notices now effective
- New rules for immediate write-offs
- Onboarding your new employee
- Proposed expansion of STP to smaller employers
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