The Federal Budget was announced last night, Tuesday 25 October 2022 by Treasurer Jim Chalmers delivering his first budget. The focus of the Budget was to keep a steady ship and show Labor’s fiscal responsibility.
From a tax perspective, there were few changes of note and will have limited impact for most taxpayers:
- Self-assessing the effective life of intangible asset measures will not be proceeding;
- Aligning tax treatment of off-market share buybacks by listed public companies with treatment of on-market share buybacks;
- Amending the thin capitalisation rules for interest limitations to limit interest deductions to 30% of profits;
- Confirming the introduction of the Fringe Benefit Tax exemption for Electric Vehicles which had been previously announced; and
- Reducing the minimum age for Superannuation downsizer contributions from 60 to 55 years.
The items that will be of greater impact for the majority of taxpayers were the non-announcements that did not mention any extension of the following:
- Low and middle income tax offset which ceased 30 June 2022;
- Carry-back losses, the last year to claim these will be the 2023 year; and
- Temporary Full Expensing of assets which will be ending on 30 June 2023.
In addition, the third round of tax cuts have been kept in place which see 78% of taxpayers see some additional benefit, though the biggest beneficiaries will be those on the highest tax brackets.
As always, if you have any queries in how the budget will impact you and your business, please reach out to your WMS team.
Should you have any questions, please do not hesitate to contact our office on (07) 5556 3300 or info@wmssolutions.com.au
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