2016 Federal Budget Summary
Yay it’s Federal Budget time – that time of the year when politicians find a sneaky way to get more tax off us without calling it a new tax! This year is no different.
If you were glued to the Voice blind auditions last night like I was, and feeling a little sad that Ricky Martin is no longer a judge – below is a summary of the budget changes - Sorry – this is not likely to cheer you up either as the budget has already been labeled “dull”.
Date of effect: Immediate
A lifetime cap on non-concessional (after-tax) superannuation contributions of $500,000 will apply from 7.30 pm on 3 May 2016. Not great news
Date of effect: 1 July 2016
The income tax threshold at which the 37% tax applies will increase to $87,001 pa, from the current $80,001 pa. Yes you can buy that next coffee with no guilt!
The tax rate that applies to small business companies will reduce to 27.5% for businesses with a turnover up to $10 million in 2016/17. No big deal
Further tax concessions will apply in future financial years. Yay
Date of effect: 1 July 2017
The annual cap on concessional (pre-tax) super contributions will reduce to $25,000, regardless of age. Not happy Jan – government making it harder to put money into super.
Those aged between 65 and 74 will be able to make super contributions regardless of whether they work or not. OK this is sort of good news.
Tax deductions will be able to be claimed for personal contributions regardless of employment status. About time!
A lifetime limit of $1.6m will be placed on the amount of superannuation that can be transferred to start pensions. Not happy Jan! The government is making super less attractive.
Earnings on investments held in ‘transition to retirement’ pensions will be taxed at 15% (currently 0%). Mmmm – undecided on this one – not good news but not the end of the world
Measures not announced or affected
Negative gearing – good news for anyone who owns a property
Age pension and other security benefits – good news
For further detailed analysis – click here
For something to cheer you up – click here