The Aussies Government budget is due next week (as is our one) and it comes as no surprise
that the timing is the same. And lo and behold some of the matters likely to be addressed may be the same as suggested for us.
Read the article:
CRACKDOWN on the use of family trusts to reduce tax, and changes to salary sacrifice arrangements for motor vehicles, are expected in next week’s federal budget.
With Federal Treasurer Wayne Swan looking to restore the budget to surplus, no one is expecting any major reform of the tax system or substantial new tax goodies.
Some cutback in negative gearing arrangement for investing in property has been floated in recent weeks, particularly for people with more than one property.
But, in the final days before the budget, speculation about changes to the negative gearing system – which could have widespread implication for the property market – has eased.
Personal investors are hoping the budget will provide more clarity about the operation of the superannuation system, including an easing of the draconian tax regime for people accidentally making excess contributions to their superannuation funds.
They are also hoping for more details about proposals to cut the caps on pre-tax superannuation contributions for people older than 50 from $50,000 to $25,000 a year, which is expected to apply from July 1 next year – and an announcement on the future of minimum drawdowns for super funds in pension mode.
The biggest change in personal tax is expected to be in the area of family trusts. The government has signalled that it is looking closely at the situation where children younger than 18 can receive more than $3000 a year tax-free from a family trust as a result of the $1500 low-income tax offset.
The $1500 offset is generally seen as a good idea, but its use in connection with family trusts has allowed people to use the trusts for tax minimisation by distributing tax-protected income to their children.
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