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Tax News

Keep up to date with the latest tax news from the Australian Taxation Office brought to you by the staff of Susan Nash and Associates. You will find plenty of useful information here designed to help you keep up to date with the latest from the ATO.

 

New from the ATO for 2016

Tax refunds to bank accounts only

The ATO will no longer issue cheques for tax refunds. All refunds will now be paid directly into a bank account.

Motor Vehicle Expenses.

Expenses for motor vehicles can now be claimed using one of two methods. The cents per kilometre method or the log book method.

Cents per kilometre Can be used for a maximum of 5,000 kms per vehicle per year. There is now a flat rate of $0.66 per kilometre travelled which replaces the different rates for different sized engines. Please note that the ATO still require you to keep a log book or some other record so you can justify the claim.

Log Book This method is unchanged. The ATO requires you to keep a log book for a minimum of three months to work out what the business % of your total motor vehicle travel is. You can then claim this percentage on all motor vehicle expenses such as fuel, registration, insurance, services, tyres and repairs. You can also claim depreciation and if you have a loan, a percentage of the interest you pay.

Instant asset write-off

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30pm on 12 May 2015 and 30 June 2017.

They can claim the deduction through their tax return.

They can also immediately deduct the balance in the small business pool if it is less than $20,000 at the end of an income year ending on or after 12 May 2015 to 30 June 2017 (including an existing pool).

See also:

Accelerated depreciation for primary producers

New laws have passed that allow primary producers to:

  • immediately deduct the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills

  • depreciate over three years the cost of fodder storage assets such as silos and tanks used to store grain and other animal feed.

This measure applies to eligible assets and expenditure incurred from 7:30pm (AEST) 12 May 2015.

See also:

Net medical expenses tax offset phase out

From 1 July 2015, the offset is only available to taxpayers with net expenses for disability aids, attendant care or aged care. Claims for the offset are limited to these types of expenses. The income testing of the offset will remain.

The offset will be abolished from 1 July 2019.

See also:

Small business income tax offset

From 2015–16 an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

  • net small business income from sole trading activities

  • share of net small business income from a partnership or trust

  • other amounts received because the individual is a partner or beneficiary in a small business entity, such as farm management repayments.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% up to $1,000 each year.

We will work out the offset based on the total net small business income reported in your income tax return.

Expanding accelerated depreciation for small businesses

New laws have passed that allow small businesses to claim an immediate deduction for assets they first acquire and start to use, or have installed ready for use, provided each depreciable asset costs less than $20,000. This temporarily replaces the previous instant asset write-off threshold of $1,000.

This measure started at 7.30pm (AEST) 12 May 2015 and will end on 30 June 2017.

The balance of the general small business pool is also immediately deductible if the balance is less than $20,000 at the end of an income year that ends on or after 12 May 2015 and on or before 30 June 2017 (including an existing general small business pool).

The 'lock out' laws have been suspended (these prevented small businesses from re-entering the simplified depreciation regime for five years if they had opted out) until the end of 30 June 2017.

Immediate deductibility for start-up costs

The law has been extended to allow for certain start-up expenses, including costs associated with raising capital, to be immediately deductible where they are incurred by a small business entity or an entity that is not in business. These provisions apply from 2015–16.

Employee share schemes

The changes to the tax treatment of employee share schemes took effect on 1 July 2015 and apply to ESS interests issued on or after that date. Some existing rules have changed and some new concessions apply to employees of start-up companies. The changes include:

  • when options are taxed

  • increasing the maximum ownership limit to 10% of the total shares (up from 5%)

  • increasing the deferral period to 15 years (up from seven years) for tax deferred schemes.

Zone offset

From 1 July 2015, eligibility for the zone offset is based on your usual place of residence. If your usual place of residence was not in a zone, you are not eligible for the zone tax offset. Certain types of workers are likely to be affected, for example, fly-in-fly-out workers.

Work-related car expenses

The four methods of car expense deduction have been reduced to two. You may now only use the 'cents per kilometre' or 'logbook' methods to calculate your work-related car expenses.

 

Capital Gains & Losses changes for 2015/2016

Capital Gains Tax Audits are now done electronically as well as manually. The ATO now has web crawling robots that search the Australian Securities Exchange, Share Registers, and State Revenue Offices both domestically and internationally.

These web crawling robots use complex algorithms to detect unreported Capital Gains when an Asset is sold. With this technology it is now impossible to hide the sales of your assets.

You will need to have the following documents to support your Capital Gains declarations when you lodge your tax return.

  • Date of Asset acquisition and its cost

  • Date of Assets Sale and its Selling Price

  • Costs of Buying and Selling this Asset

  • Costs of Holding that Asset (interest etc)

Due to the global financial crisis more taxpayers than normal will be recording losses on the sale of their capital than they would have in the past. Many will be facing Capital Losses for the first time.

In some cases it may be possible to offset a Capital Loss against a Capital Gain, but not all losses can be offset and many of those losses can only be offset against the same type of asset.

To find out exactly how we can help to manage your Capital Gains and Losses make an appointment with us to handle your next tax return today

 

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