Progress on Outstanding Tax Proposals

In an attempt to provide some certainty to taxpayers the newly elected Federal Government has made an announcement regarding the future of outstanding tax proposals. Whilst there are 92 outstanding tax proposals we have listed below some changes that may be of interest.

Proposals to proceed with changes (if any)

• Phase out net medical expenses offset for individuals (transitioned in 2014 & 2015 years)
• Introduction of rules to prohibit dividend washing, where investors could double dip on franked dividends (effective July 2013)

Proposals that will not proceed

• Removal of the statutory formula to calculate the taxable value of fringe benefits (i.e. the 20% percentage will remain)
• Tax on investment earnings in excess of $100,000 pa for superannuation funds in pension phase
• $2,000 cap on allowable deductions for work related self-education expenses

Proposals subject to further review

• Quarterly credits for the R & D incentive
• Treatment of earn outs on the sale of a business
• Not for profit sector eligibility for tax concessions
• Superannuation amendments including identity checks for rollovers to SMSFs
• CGT amendments including business restructures and script for script rollover relief

Although the announcement creates more certainty, some of the proposals are subject to review and further amendments. If you have any questions, please contact John or David.