On Tuesday, 14 May 2024, Federal Treasurer Jim Chalmers handed down the 2024-25 Federal Budget. As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect.
There are no major tax, business or superannuation changes to be introduced as a result of this budget. The key personal, business-related and superannuation tax highlights are summarised below:
1. PERSONAL TAXATION MEASURES
No changes to previously announced personal income tax rates.
The Budget did not announce any changes to the Stage 3 personal income tax cuts that are set to commence from 1 July 2024. The current financial year (2023-2024) and Stage 3 rates and thresholds will therefore be as follows:
|
Rate |
2022-23 to 2023-24 |
From 1.7.2024 (unchanged) |
|---|---|---|
|
Nil |
$0 - $18,200 |
$0 - $18,200 |
|
16% |
- |
$18,201-$45,000 |
|
19% |
$18,201 - $45,000 |
- |
|
30% |
- |
$45,001 - $135,000 |
|
32.5% |
$45,001 - $120,000 |
- |
|
37% |
$120,001 - $180,000 |
$135,001-$190,000 |
|
45% |
$180,001 + |
$190,001 + |
2. BUSINESS TAXATION MEASURES
Non-resident Capital Gains Tax (“CGT”)
A number of changes will be made dealing with the application of CGT to non-residents and will take effect from 1 July 2025. Broadly speaking, these new measures will ensure Australia can tax foreign residents on direct and indirect sales of assets with a close economic connection to Australian land. The proposed legislation will provide further clarity and will also broaden the types of assets that foreign residents are subject to CGT on.
In addition, foreign tax residents disposing of shares and other membership interests exceeding $20 million in value will be required to notify the ATO prior to the transaction being executed.
Instant Asset write-off
The Small Business Instant Asset write off is to be extended for another year.
Small businesses with an aggregated annual turnover of less than $10 million, will continue to be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025. The asset threshold applies on a per asset basis so small businesses can instantly write off multiple assets.
Removal of nuisance import tariffs
The Federal Government is proposing to permanently abolish 457 so called “nuisance” tariffs with effect from 1 July 2024. The measure will involve replacing the current 5% rate of duty with the “free” rate for the 457 tariff lines. (this include various tariffs linked to household/business items, including food items, homewares, clothing-related items, entertainment items and machinery)
https://treasury.gov.au/sites/default/files/2024-03/c2024-506306-consultation-note.pdf
3. SUPERANNUATION AND RETIREMENT MEASURES
Superannuation support on Paid parental leave
The Government will pay superannuation to recipients of eligible Commonwealth Government funded paid parental leave for births and adoptions on or after 1 July 2025.
Taxation of unrealised gains in super
There was no mention of the previously announced proposal to tax unrealised gains made by superannuation funds. This proposal is due to commence from 1 July 2025. Future StewartBrown updates will cover this important topic as announcements are made by the Federal Government.
4. OTHER MEASURES
Cost of living support
From 1 July 2024 all households will receive energy bill relief amounting to $300 per household (eligible small businesses will receive $325) and an additional 10 percent increase in Commonwealth rental assistance will be paid to nearly 1 million households renting.
Changes to HECS/HELP indexation
This budget has confirmed an earlier announcement that annual indexation will now be limited to the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) and that this measure will be effective on a retrospective basis from 1 June 2023, resulting in an immediate impact on the current amount of debt that would be repayable.
The above summary is a very small snapshot of the 2024-2025 Federal budget. If you would like to know more about any of the above or any other matters concerning this budget please contact your StewartBrown Manager or Partner for assistance.
