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What changed on 1 July 2014?

What changed on 1 July 2014?

Individuals

Temporary Budget Repair Levy. Adds 2% to the tax rate for every dollar of a taxpayer’s annual taxable income over $180,000;

Increase in the Medicare Levy from 1.5% to 2%;

Superannuation Guarantee charge increases from 9.25% to 9.5%;

Aged care reforms introduce new assets tests for resident’s accommodation and care fees.

Business

 R&D incentive reduced: In the 2014/2015 Federal Budget, the Government announced that the Research & Development Tax Incentive will be reduced by 1.5% from 1 July 2014.  This means the refundable offset will be reduced to 43.5% while the non-refundable offset will be reduced to 38.5%.  It is uncertain whether the legislation enacting this change will pass the current Parliament;

Living away from home allowance (LAFHA) transitional period ended on 30 June 2014.

SMSFs

New SMSF trustee penalties: From 1 July 2014 the ATO has greater powers to enforce the superannuation rules by levying financial penalties directly on trustees;

Concessional contribution cap changes: From 1 July 2014, the concessional contribution cap for taxpayers up to the age of 50 is $30,000. And for those 50 and above, the cap is $35,000.

Non-concessional cap changes: The non-concessional contributions cap from 1 July 2014 is $180,000 (up from $150,000) or $540,000 over 3 years.

Insurance inside an SMSF: From 1 July 2014, new insurance policies within a SMSF must be consistent with the death, terminal illness, and permanent and temporary incapacity conditions of release in the Superannuation Industry (Supervision) Act.

 

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