it’s more than a workbook. · tax incentives for early stage innovation companies tax incentives...

IT’S MORE THAN A WORKBOOK.IT’S READY TO GO WHEN YOU ARE.

MYOB 2018 Tax e-Seminars

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

2

Contents Contents .......................................................................................................................................................... 2 Overview .......................................................................................................................................................... 7 Tax changes affecting multiple returns .............................................................................................. 10

Conclusion of the temporary budget repair levy (TBRL) ................................................. 10 Foreign residents CGT main residence exemption and principal asset test ............. 19 Increasing the CGT discount for investors in affordable housing ................................. 21 Changes to foreign resident capital gains withholding (FRCGW) ................................ 22 Accelerated depreciation for small businesses extended until 30 June 2018 ......... 28 Limiting plant and equipment depreciation deductions for residential premises assets .................................................................................................................................................. 29 Removal of residential rental property travel expenses for individuals ..................... 32 Vacancy fee for foreign acquisitions of residential property ......................................... 34 International Dealings Schedule (IDS) .................................................................................... 36 Tax incentives for early stage innovation companies ...................................................... 45 Tax incentives for early stage venture capital limited partnerships (ESVCLP) .......... 51 Junior minerals exploration incentive (JMEI) ....................................................................... 57 Country-by-Country reporting: phase 2 ............................................................................... 64 Diverted profits tax (DPT) ............................................................................................................ 65

Tax changes for individual returns ....................................................................................................... 68 Medicare levy low-income threshold increase ................................................................... 68 Temporary budget repair levy fringe benefit tax changes – FBT rate sunset ........ 69 FBT changes and income tests for tax offsets .................................................................... 70 Allocation of PAYG credits and payments received against overseas repayment levies ................................................................................................................................................... 72 Cost of managing tax affairs ...................................................................................................... 74 Tax deductions for personal superannuation contributions .......................................... 76 Tax offset for spouse contributions – increase in income threshold .......................... 79 Transfer balance cap ..................................................................................................................... 81 Reporting – taxable government grants and specified payments .............................. 83

Tax changes for company returns ....................................................................................................... 86 Tax rate reduction for companies who qualify as base rate entities .......................... 87 Extension of tax rate reduction ................................................................................................. 97 Tax rate reductions – franking credits .................................................................................... 98

Tax changes for superannuation and SMSFs ................................................................................ 100 Strengthening the integrity of income streams ................................................................ 100 Removal of the existing anti-detriment provisions .......................................................... 103 Total superannuation balance ................................................................................................ 106 Transfer balance cap .................................................................................................................. 109


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

3

Superannuation changes from 1 July 2017 ..................................................................................... 114 Concessional contributions cap reduction .......................................................................... 114 Non-concessional contributions cap reduction ................................................................. 116 Five-year carry forward of concessional contribution cap ............................................ 117 First home super saver scheme (FHSS) ................................................................................ 118 Division 293 threshold reduction ........................................................................................... 120 Streamlining superannuation release authorities ............................................................. 121 Innovative retirement income stream products ............................................................... 122

Budget commentary ............................................................................................................................... 124 Individuals ...................................................................................................................................... 124

A new seven-year personal income tax plan ....................................................... 124 Medicare levy – low income thresholds to increase ......................................... 126 Retaining the Medicare levy at 2% ........................................................................... 126 Income tax exemption for certain veteran payments ....................................... 126 License schemes to license an individual’s fame or image targeted ........... 126

Businesses ....................................................................................................................................... 127 R&D tax incentive changes ........................................................................................... 127 Companies with annual turnover above $20 million .......................................... 127 Companies with annual turnover less than $20 million. .................................. 128 $20,000 immediate asset write-off extended ...................................................... 128 Division 7A UPE rule strengthened – major reform delayed .......................... 128 Deductions for vacant land to be denied .............................................................. 129 No small business CGT concessions for assignment of partnership rights 129 Non-compliant payments to employees and contractors no longer deductible .......................................................................................................................... 130 Significant global entity definition broadened ..................................................... 130 Tightening of thin capitalisation rules ..................................................................... 130 Tax exempt entity loans ................................................................................................ 131 50% CGT discount removed for MITs and attribution MITs at the trust level ................................................................................................................................................ 131 Anti-avoidance rules for circular trust distributions extended to family trusts ................................................................................................................................................ 132 Testamentary trusts and injected assets ................................................................. 132

Superannuation .............................................................................................................................133 Increased membership of SMSFs .............................................................................. 133 Three-yearly audit cycle for some SMSFs .............................................................. 133 Preventing inadvertent concessional cap breaches ........................................... 133 Improving integrity of personal contributions deductions ............................... 133 Super work test exemption for recent retirees .................................................... 134


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

4

Black economy measures ......................................................................................................... 135 Reforms to combat illegal phoenixing and black economy .............................135 Taxable payments reporting system to be expanded .......................................135 Large government contract tenders required to be tax compliant ...............135

Practitioner lodgment service (PLS) .................................................................................................... 137 How to use PLS ................................................................................................................ 137 PLS lodgment flow ......................................................................................................... 138

ATO pre-fill for individual returns ....................................................................................................... 140 What data will be pre-filled? ........................................................................................ 141 How do I use pre-fill manager? .................................................................................. 141

Support Matters ........................................................................................................................................ 143 24/7 access to Knowledge Base and help ......................................................................... 143

Check out our new improved Knowledge Base ................................................. 143 How do I use [F1] help? ................................................................................................ 145 Training ............................................................................................................................... 146 Ask a colleague ................................................................................................................ 146

FAQs from our support desk ................................................................................................... 146 Most popular KB articles .............................................................................................. 146 How to distribute a foreign tax credit from a trust ............................................. 147 How to distribute an overall trust loss between trusts (V335 error) ............ 148

Key dates and support contact details .............................................................................................. 151 MYOB Tax 2018.0 release date .................................................................................. 151 ATO ELS gateway ............................................................................................................ 151 ATO availability ................................................................................................................. 151 ATO PLS lodgments ........................................................................................................ 151 ATO PLS processing ....................................................................................................... 151 ATO refunds ...................................................................................................................... 151

Getting support from MYOB ................................................................................................... 152 Submit a support request .............................................................................................152 Contact details ..................................................................................................................152 Extended support hours for tax season...................................................................152 Online community forum for accountants .............................................................152 End of financial year hub ..............................................................................................152

Appendix A – 2018 Tax rates ................................................................................................................ 153 Resident individual 2017–18 ........................................................................................ 154 Non-resident individual 2017–18 ............................................................................... 154 Unearned income of resident minors (under 18 years) ..................................... 154 Unearned income of non-resident minors (under 18 years) ........................... 155 Tax rates for working holiday makers (WHMs) from 1 January 2017 ........... 155 Medicare levy 2017–18 .................................................................................................. 156 Medicare levy surcharge 2017–18 ............................................................................. 156


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

5

Low income tax offset 2017–18 ................................................................................... 157 Private health insurance rebate 2017–18 ................................................................ 158 Dependency offsets 2017–18 ...................................................................................... 159 Zone and overseas forces rebate 2017–18 ............................................................ 159 Seniors and pensioners tax offset (SAPTO) ........................................................... 160 SAPTO pension age test tables .................................................................................. 161 Net medical expenses tax offset (NMETO) 2017–18 ............................................ 161 Motor vehicle rates per business km 2017–18 ....................................................... 161 Private company loans 2017–18 ................................................................................ 162 Research and development (R&D tax offset) 2017–18 ....................................... 162 Income test thresholds 2017–18 ................................................................................ 162 HELP, TSL, SSL or ABSTUDYSSL and SFSS thresholds ..................................... 163 Student financial supplement loan repayments thresholds ............................ 163 Employment termination payments 2017–18 ....................................................... 164 Genuine redundancy and early retirement scheme payment limits ........... 165 Superannuation lump sum caps (indexed annually) .......................................... 165 Transfer balance cap and defined benefit income cap .................................... 165 Superannuation contributions caps – concessional .......................................... 166 Superannuation contributions caps – non-concessional ................................. 166 Income exceeding $250,000 – extra tax on contributions .............................. 166 Superannuation guarantee charge ........................................................................... 167 Government super co-contribution rates ............................................................... 167 Low-income superannuation contributions offset 2017–18 ............................ 168 Low-income superannuation tax offset 2017–18 ................................................ 168 Super contributions on behalf of spouse offset 2017–18 ................................. 168 Supervisory levy – self-managed super funds .................................................... 169 Improvements to pre-CGT assets ............................................................................. 169 General interest charge rates ..................................................................................... 170 Fringe benefits tax .......................................................................................................... 170 Company tax rates 2017–18 ......................................................................................... 171 Trustee tax rates 2017–18 .............................................................................................. 176 Individual beneficiaries assessed under section 98(3) and 98(4) .................... 176 Company trustee beneficiaries assessed under section 98(3) and 98(4) ..... 177 Deceased estate less than 3 years from date of death (section 99) .............. 177 Deceased estate greater than 3 Years from date of death – resident beneficiary ..........................................................................................................................178 Deceased estate greater than 3 years from date of death – resident beneficiary ..........................................................................................................................178 No beneficiary presently entitled (section 99A) ....................................................178

OVERVIEW


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

7

Overview Changes to Australian Tax and MYOB Tax 2018 are listed below.

Tax changes affecting multiple returns Conclusion of the temporary budget repair levy (TBRL) Foreign residents CGT main residence exemption and principal asset test Increasing the CGT discount for investors in affordable housing Changes to foreign resident capital gains withholding (FRCGW) Accelerated depreciation for small business entities extended until 30 June 2018 Limiting plant and equipment depreciation deductions for residential premises assets Removal of residential rental property travel expenses for individuals Vacancy fee for foreign acquisition of residential property International dealings schedule (IDS) Tax incentives for early stage innovation companies Tax incentives for early stage venture capital limited partnerships (ESVCLP) Junior minerals exploration incentive (JMEI) Country-by-Country reporting: phase 2 Diverted profits tax

Tax changes for individual returns Medicare levy low-income threshold increase Temporary budget repair levy fringe benefit tax changes – FBT rate sunset FBT changes and income tests for tax offsets Allocation of PAYG credits and payments received against overseas repayment levies Cost of managing tax affairs Tax deductions for personal superannuation contributions Tax offset for spouse contributions – increase in income threshold Transfer balance cap Reporting – taxable government grants and specified payments Tax rate reduction for companies who qualify as base rate entities

Tax changes for partnership returns No changes for 2018

Tax changes for trust returns No changes for 2018


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

8

Tax changes for company returns Tax rate reduction for companies who qualify as base rate entities Extension of tax rate reduction Tax rate reductions for franking credits

Tax changes for superannuation and self managed super funds Strengthening the integrity of income streams Removing the existing anti-detriment provisions Total superannuation balance Transfer balance cap

Budget commentary Tax highlights and summary from the 2018 federal budget

Practioner lodgment service (PLS) Overview of the how, the why, and the when of PLS to date, plus what’s next

ATO pre-fill of individual returns A walk-through of the new ATO pre-fill features and workflow for individual returns

Support Matters What’s changed with your support options and a look at some common tax calls

Key dates and support contact details All the important dates for your reference

Tax changes affecting multiple returns


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

10

Tax changes affecting multiple returns

Conclusion of the temporary budget repair levy (TBRL)

Forms affected I T C F MS

Legislative changes

Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014 received Royal Assent on 25

June 2014.

The temporary budget repair levy (TBRL) will cease to apply from 1 July 2017. The ATO will

cease the TBRL for 2017–18 assessments onwards. The TBRL applies from 1 July 2014 to 30

June 2017 and adds an additional 2% tax on income over $180,000.

What are the changes?

Tax rates will decrease from 47% to 45% for:

Trustees liable under S99A Trustees liable under S98(4) Non-complying superannuation funds Non-arm’s length component of the taxable income of a superannuation fund Non-complying approved deposit funds Non-arm’s length component of the taxable income of an approved deposit fund Non-arm’s length component of the taxable income of a pooled superannuation trust Non-TFN contributions income of a superannuation fund or retirement savings account

provider, less the ordinary rate of tax paid by the fund or provider Share of the net income of a partnership attributable to a partner not having control and

disposal of that income The calculation that applies to the Div6AA The non-final withholding tax rate for bearer debentures Employee share schemes Excess non-concessional contributions tax Interest on non-resident trust distributions Trust recoupment tax Family trust distribution tax (primary liability) Trustee beneficiary non-disclosure tax (102UK(2)(a) Trustee beneficiary non-disclosure tax (102UM(2)(a)PLS review Untainting tax.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

11


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

12

What are the changes in MYOB Tax?

Trusts

In the 2017 tax tables, 2% TBRL is included for amounts payable by the trustee that either

exceed the $180,000 distribution or have the highest marginal rate applicable to the

distribution.

The above rate is applicable to distributions made using the tax tables for:

S98(1) Present entitlement under legal disability S98(2) Deemed Presently entitled – s95A(2) not under S98(3) & s98(4) Non-resident Individual Trustee beneficiary S98(3) & s(98)4 Non-resident company beneficiary S99 Bankruptcy Estate S99 Deceased Estate less than 3 years from date of death S99 Deceased Estate Greater than three years from date of death S99 Excepted Trust Income Section 102AG(2)(c) S99A Any Other Estate.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

13

The 2018 rates are shown below. The TBRL has been deleted from the box and the calculation.

This includes applying these rates to beneficiaries who are under the age of 18 and come

under division 6AA rates (47% reduced to 45% for the conclusion of the TBRL).

Therefore, the top marginal rate reduces to 45% (plus 2% Medicare levy, totalling 47%).


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

14

Superannuation funds & SMSFs

2017 Superannuation Fund Tax Rates > Complying funds:

2018 changes:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

15

2017 Superannuation Fund Tax Rates > Non-complying:

2018 changes:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

16

2017 Superannuation Fund Tax Rates > Complying Approved Deposit Funds:

2018 changes:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

17

2017 Superannuation Fund Tax Rates > Non-complying Approved Deposit Funds:

2018 changes:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

18

2017 Superannuation Fund Tax Rates > Pooled Superannuation Trusts:

2018 changes:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

19

Foreign residents CGT main residence exemption and principal asset test

Forms affected I T

Legislative changes

The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2)

Bill 2017, had the second reading moved before Senate on 19 March 2018. To date, this bill is

not law.


The foreign resident CGT change will deny foreign tax residents access to the CGT main

residence exemption from 7:30pm (AEST) on 9 May 2017. Existing properties held prior to this

date will be grandfathered until 30 June 2019. The proposed start date for the measure is 9

May 2017.

Foreign residents who dispose of property after 9 May 2017 must determine their CGT liability

and comply with the foreign resident CGT withholding (FRCGTW) rules.

Individuals

Under the proposed law, if individuals are foreign residents when a CGT event occurs to a

dwelling in which they have an ownership interest, the individuals won’t be entitled to the CGT

main residence exemption.

Deceased estates

A trustee of a deceased estate will not be entitled to the CGT main residence exemption in

respect of an ownership interest in a dwelling of a deceased individual if the deceased was a

foreign resident at the time of death.

A beneficiary of a deceased estate will also not be entitled to the portion of the CGT main

residence exemption in respect of an ownership interest in a dwelling of a deceased individual

if the deceased was a foreign resident at the time of death.

However, a beneficiary of a deceased estate is entitled to the portion of the CGT main

residence exemption in respect of an ownership interest in a dwelling of a deceased individual

if the deceased was a resident at the time of death. This applies even if the beneficiary is a

foreign resident at the time a CGT event occurs to the dwelling.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

20

The beneficiary is denied any additional component of the main residence exemption that they

are otherwise entitled to if they are a foreign resident at the time a CGT event occurs to the

dwelling.

Special disability trust

A trustee of a special disability trust is not entitled to the CGT main residence exemption in

respect of an ownership interest in a dwelling, if the principal beneficiary of the trust was a

foreign resident at the time:

a CGT event occurs to the dwelling of their death.

A beneficiary who is bequeathed an ownership interest in a main residence at the time of

death of the principal beneficiary of a special disability trust is not entitled to the CGT main

residence exemption accrued by the special disability trust if the principal beneficiary was a

foreign resident at the time of their death.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

21

Increasing the CGT discount for investors in affordable housing

Forms affected I T (g)

Legislative changes


Bill 2017, had the second reading moved before Senate on 19 March 2018. To date, this bill is

not law.


An additional 10% CGT discount will be made available to resident individuals investing in

qualifying affordable housing. This means investors in qualifying affordable housing will be

entitled to a 60% discount on capital gains tax.

To qualify for the additional discount, housing must be provided at below market rent and

made available for eligible tenants on low to moderate incomes. Tenant eligibility will be based

on household income thresholds and household composition.

The affordable housing must also be managed through a registered community housing

provider and the investment held as affordable housing for at least three years.

The additional discount will be pro-rated for periods where the property is not used for

affordable housing purposes. Non-residents will be ineligible for the CGT discount.

The additional discount will also flow through to resident individuals investing through

managed investment trusts (MITs) where the property has been held for a minimum of three

years. 


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

22

Changes to foreign resident capital gains withholding (FRCGW)

Forms affected I P T C F MS

Legislative changes

The Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Act

2017 received Royal Assent on 22 June 2017.


This implements two changes that were announced as part of the 2017–18 federal budget:

A reduction in the threshold for real property interests from $2 million to $750,000 An increase in the withholding rate from 10% to 12.5%.

These two changes affect contracts entered into on or after 1 July 2017.

It imposes an obligation on purchasers to withhold 12.5% of the purchase price and pay it to

the ATO.

The foreign resident vendor must lodge a tax return at the end of the financial year, declaring

their Australian assessable income, including any capital gain (profit) from the disposal of the

asset.

Australian resident vendors can avoid the requirement of the purchaser to withhold the 12.5%

by providing one of the following to the purchaser prior to settlement:  

for Australian real property, a clearance certificate obtained from the ATO   Australian resident vendors selling real property need to obtain a clearance certificate from

the ATO prior to settlement, to ensure they don't incur the 12.5% non-final withholding for other asset types, a vendor declaration the vendor may provide the purchaser with a vendor’s declaration to specify withholding is

not required on the acquisition of the asset.

Foreign resident vendors may apply for a variation of the withholding rate or make a

declaration that a membership interest is not an indirect Australian real property interest.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

23


Company, superannuation fund and SMSF returns

FRCGW is calculated from the tables:

Click H8 to open the Foreign resident capital gains withholding worksheet. Click any of the buttons shown to see the tables where the FRCGW is credited to the taxpayer:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

24

By completing the worksheet, the figure will be displayed in FRCGW Credit:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

25

Individual returns

Item 18, label X:

Click label X in item 18, to open the calculator of FRCGW:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

26

Trust returns

Item 21, label B

Click label B in item 21, to open the calculator of FRCGW:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

27

Click Distributions from Trusts:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

28

Accelerated depreciation for small businesses extended until 30 June 2018

Forms affected – none

Legislative changes

The Tax Laws Amendment (Small Business Measures No. 2) Act 2015 and Treasury Laws

Amendment (Accelerated Depreciation for Small Business Entities) Act 2017 received Royal

Assent on 22 June 2017.


Small business entities can continue to claim an instant asset write-off for assets purchased that

are under $20,000.


There are no changes in MYOB Tax for 2018. The depreciation worksheet (d) calculations

remain the same.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

29

Limiting plant and equipment depreciation deductions for residential premises assets

Forms affected I P T MS (ren) (d)

Legislative changes

The Treasury Laws Amendment (Housing Tax Integrity) Act 2017 received Royal Assent on 30

November 2017.


Depreciation deductions on previously used plant and equipment for residential rental

properties are no longer allowed. Changes apply to assets acquired from 7.30pm (AEST) on 9

May 2017, unless the asset was acquired under a contract entered into before this time.

The changes also apply to assets acquired before this time if the assets were first used or

installed ready for use by an entity during or prior to the 2016–17 income year, but the asset

was not used at all for a taxable purpose in that income year.

For a newly built property, or a property that has been substantially renovated, depreciation

deductions for decline in value of the new depreciating assets is allowed if no one previously

claimed any depreciation deductions on it, and either:

no one lived in the property when it was acquired, or if anyone lived in the property after it was built or renovated, it was acquired within six

months (of the property being built or renovated).

The changes do not affect depreciation deductions for decline in value that arise for:

new depreciating assets in a new residential rental property new depreciating assets in a residential rental property that is not new a rental property that does not provide residential accommodation if you carry on a business corporate tax entities superannuation plans other than self-managed superannuation funds public unit trusts managed investment trusts unit trusts or partnerships whose members are any of these listed entities.

The proportion of the decline in value of the asset that cannot be deducted, is recognised as a

capital gain or loss when the asset stops being used.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

30


We’ve added an information message to the 2018 Rental Property Schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

31

MYOB depreciation worksheet (d) changes

We’ve added a new question Is the deduction denied in accordance with Treasury Laws Amendment (Housing Tax Integrity) Act 2017 regarding ‘previously used’ assets (P & E)? Y/N.

It will be N by default, which means that depreciation will be calculated as it is in our system.

We’ve added a new field Non-ded. depreciation for non-deductible depreciation.

If answer to the new question is Y, the depreciation amount calculated is displayed in Non-ded. depreciation rather than Business depreciation.

The private use percentage will work the same way as it works for business depreciation, for

example, if private use is 10%, 10% of the full depreciation amount will go to Private use depreciation and the remaining 90% will go to Non-ded. depreciation.

For assets rolled over from 2017–18, change the checkbox from N to Y with the corresponding

change in calculation.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

32

Removal of residential rental property travel expenses for individuals


Legislative changes

The Treasury Laws Amendment (Housing Tax Integrity) Act 2017 received Royal Assent on 30

November 2017.


Disallow deductions of travel expenses for residential rental property.

A residential premise (property) is land or a building that is:

occupied as a residence or for residential accommodation intended to be occupied, and is capable of being occupied, as a residence or for residential

accommodation.

Travel expenses can still be claimed if:

you are running a property investing business you are an excluded entity, such as a:

corporate tax entity superannuation plan that is not a self-managed superannuation fund public unit trust managed investment trust

you are a unit trust or a partnership, and all members are entities of a type listed above the investment property is a commercial premise.

Generally, owning one or several rental properties will not be considered as being in the

business of rental properties.

The receipt of income by an individual from the letting of property to a tenant, or multiple

tenants, will not typically amount to the carrying on of a business; these activities are generally

considered a form of investment rather than a business.

As with prior years, the travel expenditure cannot be included in the cost base for calculating

your capital gain or capital loss when you sell the property.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

33


As there are still some scenarios where rental travel deductions can be claimed, we haven’t

removed the label from rental schedules.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

34

Vacancy fee for foreign acquisitions of residential property


Legislative changes

The Treasury Laws Amendment (Housing Tax Integrity) Act 2017 and the Foreign Acquisitions

and Takeovers Fees Imposition Amendment (Vacancy Fees) Act 2017 both received Royal

Assent on 30 November 2017.


Foreign owners who submitted an application or notice to the Foreign Investment Review

Board (FIRB) from 7:30pm (AEST) 9 May 2017 need to consider the impact of the vacancy fee.

The vacancy fee applies to foreign individuals, as well as any companies or trusts held by

foreign persons.

Foreign persons acquiring a residential property under a new dwelling exemption certificate or

a near-new dwelling exemption certificate (held by the developer) approved prior to the time

specified, will not be affected.

The vacancy fee applies to foreign owners of unoccupied residential property or residential

property not genuinely available on the rental/licensing market (with at least 30-day terms), for

at least a total of six months (183 days) out of a year (vacancy year). The person occupying the

property does not have to be the owner of the property.

The vacancy year commences on the owner’s initial right to occupy the property (such as

settlement).

The new rules also require foreign owners to report annually to the Commissioner of taxation

in respect of each dwelling, even where there is no liability to the vacancy fee. With the

vacancy fee for a foreign owner being based on an individual reporting period, affected

persons and entities need to be diligent to ensure that their reporting deadlines under the new

regime are being met.

Vacancy fee payable

The vacancy fee payable will be equivalent to the fee payable for the residential land

acquisition application to the FIRB. An acquisition of residential land priced up to $1 million will

be expected to incur a FIRB application fee of $5,500. If a fee that would have been payable at


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

35

the time of application of acquisition was waived, the vacancy fee is the lowest fee payable for

a residential land acquisition, being $5,500.

Purchases covered by an exemption certificate (i.e. new dwelling or near-new dwelling

certificates) held by the developer will be assessed as if the purchasers made the acquisition

application individually. The effect of which is that the same rates as above apply.

Foreign owners of Australian residential property need to submit an annual vacancy fee return

within 30 days after the end of vacancy year even where there is no obligation to pay vacancy

fees. The ATO will notify the owner of any applicable vacancy fees. Owners should be aware

that penalties will apply for non-compliance.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

36

International Dealings Schedule (IDS)

Forms affected P T C AMIT (ids)

Legislative changes

The Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015 received Royal

Assent on 11 December 2015

The Diverted Profit Profits Tax Act received Royal Assent on 4 April 2017.


The IDS focuses on profit shifting by multinationals through recent, current and prospective

legislation arising from diverted profits tax (DPT) and base erosion profit shifting (BEPS).

Changes to the IDS will impact small and large multinationals who use their associated foreign

entities, potentially shifting their profits out of Australia. The IDS alterations are focused on

ensuring substance in the global value chain and greater transparency.

The IDS applies to cross-border arrangements. Some of the significant global entities (SGEs) by

which the diverted profits tax (DPT) and other base erosion and profit shifting (BEPS)

arrangements can apply are represented in market segments that rely on risk assessment using

the IDS for subsequent risk modelling and risk filters before any compliance action is pursued.

The IDS 2018 form and instructions will reflect new and altered labels for the 2018 tax year.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

37


Head schedule

Select Y on labels A–F to be directed to the relevant section:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

38

Section A – International related party dealings

New question – 13f

If you answer Y at label A, you’ll need to enter amounts in labels C and D.

Section B – Financial arrangements

New question – 19a

If you answer Y at label A, you’ll need to enter amounts in labels B and C.

Section C – Interests in foreign entities

New question – 21a

If you answer Y at label A, you’ll be able to enter amounts in question 23 Specify the amounts in calculation of your attribution income of CFC.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

39

New question – 21b

If you answered Y to question 21a, you’ll need to fill in item 21b, labels B, C and D:

New question – 21c

If you answer Y at label A, you can fill in labels B, C and D. If you answer N, labels B, C and D

will be blocked.

New question – 21d

If you answer Y at label A, you can fill in labels B, C and D. If you answer N, labels B, C and D

will be blocked.

New question – 21e


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

40

Changes to question 23

We’ve added 23a Specify the amounts of notional assessable income under the following sections of the ITAA 1936, with

Listed countries CFC (Section 385) requiring labels A, B, C and D to be filled. Specified countries CFC (Section 384) requiring labels E, F and G. Other unlisted countries (Sections 384) requiring labels H, I and J.

The above amounts are added together at Total Notional Assessable Income at label K.

23b, Specify the amounts of attribution income modifications, with;

Listed countries at label A. Specified countries at label B. Other unlisted countries at label C.

The above amounts are added together at Total attribution income at label D.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

41


28a Were you a beneficiary of a non-resident trust of did you have an interest in or an entitlement to acquire an interest in, either then income or capital of a non-resident trust during the income year? Y/N

28b Do any of the schedules within PCG 2017/1 apply to your offshore dealings? Y/N

If you answer Y to 28a or 28b, fill in the type of hub arrangements that have the highest dollar

value of property or services imported to or exported from Australia in labels B to J:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

42


29a Were you a partner in a foreign hybrid limited partnership (FHLP) or a shareholder in a foreign hybrid company (FHC)? Y/N

If you answer Y, labels B and C can be filled in.

29b Apart from 29a, did you have any income or expense in connection with any cross-border hybrid entity? Y/N

If you answer Y, labels B and C can be filled in.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

43

Section D – Thin capitalisation


30a Did the thin capitalisation rules affect you? Y/N.

If you answer N, go to question 30b If you answer Y, go to question 31.

30b is new and has three Y/N labels:

A – 2 million threshold test B – 90% asset threshold test C – Exception of certain special purpose entities..

If you answer Y to label A, B, or C, go to question 40 in Section E of the IDS.

New questions – 37

37a Did you choose to recognise an internally generated intangible item under section 820-683? Y/N.

If you answer Y, enter an amount in 37b If you answer N, go to question 37c.

37c Did you choose to revalue an intangible asset under section 820-684? Y/N.

If you answer Y, enter an amount in 37d.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

44

Section E – Financial Services Entities

New questions – 40

40a Notional amount of interest under Part IIIB, and label C, Specify the main currency of the notional amount to be borrowed under section 160ZZZ

40b Notional derivative and foreign exchange transactions under Part IIIB

Notional amount taken to be paid or received under section 160ZZZE with labels G and H Notional amount taken to be paid or received under section 160ZZZF with labels I and J.

40c Are you a foreign bank or other qualifying financial entity that has elected out of Part IIIB of the ITAA 1936? Y/N.

If you answer Y, provide the following information at labels L and M

Label L asks the taxpayer to provide average quarterly notional amount taken to be borrowed under section 160ZZZ

Label M asks the taxpayer to specify the main currency of the notional amount taken to be borrowed under section 160ZZZ

If you answer N, go to question 41.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

45

Tax incentives for early stage innovation companies


Legislative changes

The Tax Laws Amendment (Tax Incentives for Innovation) Act 2016, received Royal Assent 5

May 2016.

The Treasury Laws Amendment (2017 Measures No. 1) Act 2017 received Royal Assent on 4

April 2017.


The tax incentives provide concessional tax treatment for investments made in a range of

innovative start-up companies with high growth potential.

The changes provide investors that acquire newly-issued shares in a qualifying Australian early

stage innovation company (ESIC) with:

A non-refundable carry-forward tax offset equal to 20% of the amount paid for their investment, subject to a maximum cap of $200,000 per year for the investor and their affiliates combined (inclusive of current year and carried forward tax offset amount). A separate investment cap also applies to retail (non-sophisticated) investors

A modified CGT treatment for qualifying shares, including an exemption for capital gains on shares continuously held for one to ten years. Any capital losses on shares held for less than ten years must be disregarded. This CGT treatment applies to shares that would have qualified for the tax offset if the maximum cap had not been exceeded, so that an investor is able to disregard capital gains on investments over $1 million

An ESIC that issues shares that may give rise to an entitlement to the offset during a financial year must report information about their investors to the Commissioner on an approved form, which is due 31 days after the end of the financial year.

Investors (or the partner, or the beneficiary or trustee in certain cases), where the investor is a

partnership or trust) will be able to claim a non-refundable carry-forward tax offset, equal to

20% of the amount paid for their qualifying investment in newly issued shares in a qualifying

ESIC. The tax offset is capped at a maximum of $200,000 for an investor and their affiliates

combined in each year (inclusive of current year and carried forward amounts). For a retail

(non-sophisticated) investor, the tax offset is effectively capped at $10,000.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

46

In Tax Time 2017, we built processes to allow the initial claim of the offset. In Tax Time 2018,

taxpayers can:

include tax offsets carried forward from the previous year and enable pre-population of carried forward amounts where appropriate

apply a modified CGT treatment when a CGT event occurs in relation to qualifying shares pre-fill the tax offset based on information received in the ESIC report.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

47


Individuals

In T9 Early stage investor, we’ve added Tax offset carried forward from previous year at

label O:

Click label O to open the Early Stage Investor (esi) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

48

Company

In 23 Early stage investor tax offset, we’ve added Tax offset carried forward from a previous year at label R:

Click label O to open the Early Stage Investor (esi) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

49

Fund and SMSF return

In Section D: Income Tax Calculation Statement, we’ve added two new labels:

Early stage investor tax offset at label D3 Early stage investor tax offset carried forward from a previous year at label D4.

Click label D3 or D4 to open the Early Stage Investor (esi) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

50

Trusts

In question 52 Non-refundable carry forward tax offsets, we’ve added Early stage investor tax offset at label I:

Click label I to open the Early Stage Investor (esi) schedule:

At question 55, we’ve added:

Early stage investor tax offset at label J Early stage investor tax offset carried forward from previous year at label M.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

51

Tax incentives for early stage venture capital limited partnerships (ESVCLP)


Legislative changes

The Tax Laws Amendment (Tax Incentives for Innovation) Act 2016, received Royal Assent on 5

May 2016.

The Treasury Laws Amendment (2017 Measures No. 1) Act 2017 received Royal Assent on 4

April 2017.


This measure:

provides investors in an ESVCLP a non-refundable carry forward tax offset up to 10% of the contributions they made during an income year

increases the maximum fund size of an ESVCLP from $100 million to $200 million clarifies existing arrangements, and allows a wider range of investment activities to be

made by VCLPs and ESVCLPs. In 2018, the ATO will:

add a new label to show the amount of early stage venture capital limited partnership tax offset carried forward from previous year

introduce a new CGT exemption code for taxpayers who have capital gains/losses disregarded

allow the tax offset carried forward from previous year to be pre-filled in a later year return (individual only).


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

52


Individuals

In T8 Early stage venture capital limited partnership, we’ve added Tax offset carried forward from previous year at label M.

Click label M to open the Early Stage Venture Capital limited Partnership (esv) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

53

Company

In 22 Early stage venture capital limited partnership (ESVCLP) tax offset, we’ve added Tax offset carried forward from previous year at label P.

Click label M to open the Early Stage Venture Capital Limited Partnership (esv) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

54

Fund and SMSF

In Section D, question 12 Income tax calculation statement, we’ve added two new labels:

Early stage venture capital limited partnership tax offset at label D1 Early stage venture capital limited partnership tax offset carried forward from a previous

year at label D2.

Click label D1 or D2 to open the Early Stage Investor (esi) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

55

Trusts

In question 52 Non-refundable carry forward tax offsets, we’ve added Early stage venture capital limited partnership (ESVCLP) tax offset at label H:

Click label H to open the Early Stage Venture Capital Limited Partnership (esv) schedule:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

56

At item 55 beneficiary 1,2,3…, we’ve added a new label for Early stage venture capital limited partnership tax offset at label T.

At item 55 beneficiary income to which no beneficiary entitled to…, we’ve added a new label

for:

Early stage venture capital limited partnership tax offset at label T ESVCLP tax offset carried forward from previous year at label K.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

57

Junior minerals exploration incentive (JMEI)


Legislative changes

The Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 received Royal

Assent on 4 April 2017.


The introduction of the junior minerals exploration incentive (JMEI) is to provide a tax incentive

for junior exploration companies.

The JMEI will enable eligible companies to create and issue tax credits, by giving up a portion

of their tax losses from greenfields mineral exploration expenditure, which can then be

distributed to eligible shareholders. Tax credits can only be generated for new shares issued in

that income year.

Australian resident shareholders that are issued with a tax credit will be entitled to a refundable

tax offset or additional franking credits. The issuing company's carry forward losses will be

reduced to reflect the amount of the credits created.

Participation

The ATO will review the application and advise the company:

of the amount of exploration credits the company may be entitled to create if the cap has been reached, that the company is not entitled to any exploration credits

This will require the development of a new application form, given the cross-over with the final

period of the Exploration Development Incentive.

Notification

Exploration companies are to report:

the amount of exploration expenditure they incurred the amount of capital they raised the amount of tax loss to be converted to exploration credits the amount of credits they intend on issuing.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

58

This may be done by modifying the existing EDI participation form to create a JMEI

participation form.

The JMEI is voluntary and companies seeking to participate need to electronically lodge their

participation form with the ATO by the due date. The ATO will allocate each eligible entity an

exploration credit allocation on a first come, first served basis until the annual exploration credit

cap for each income year is exhausted.

The JMEI applies from the 2017–18 income year with exploration credits capped at a total of

$100 million over a four-year period:

$15 million in the 2017–18 income year $25 million in the 2018–19 income year $30 million in the 2019–20 income year $30 million in the 2020–21 income year.

JMEI replaces the exploration development incentive that ended on 30 June 2017.

Excess exploration credit tax

Entities are liable for excess exploration credit tax where they issue exploration credits:

beyond their maximum exploration credit entitlement in circumstances where they are not permitted to to investors beyond the investors’ entitlement.

Entities are also subject to shortfall interest.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

59


Individual

If an individual is an Australian resident for the whole of the income year, they may be entitled

to a refundable tax offset equivalent to the amount of exploration credits they have received.

If they have received exploration credits from their shareholdings in a greenfields minerals

explorer, claim the tax offset by completing the supplementary section of the 2018 tax return.

The existing labels created on income tax returns for the EDI will be used to report JMEI offsets

and credits. These can be claimed under item T11 in the tax offsets section of the return.

Click on P at item T11 to navigate to the Other refundable tax offsets screen:

Click on Exploration credits to open the Exploration Development Incentive Credits window:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

60

Superannuation entity or self-managed superannuation fund

A superannuation entity or self-managed superannuation fund (SMSF) is entitled to a

refundable tax offset where it has been an Australian resident for the whole income year and

has received exploration credits.

For a superannuation entity or SMSF that has received exploration credits, the amount of the

tax offset is the value of the exploration credits received during the income year. Include that

amount at item E4 of the relevant tax return.

Corporate tax entity

You are not entitled to refundable tax offsets for exploration credits you receive. If you are an

Australian resident taxpayer for the whole of the income year, you can recognise amounts of

exploration credits received as a franking credit in your franking account and distribute these to

your shareholders.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

61

Trust or partnership

Trusts and partnerships are generally unable to directly benefit from exploration credits.

However, if you are a trust or partnership, you may provide a statement to your partners or

beneficiaries advising of the exploration credits received and the partner’s or beneficiary’s

share of the exploration credits received during the income year (distribution statement). The

member's share of the exploration credits received must be the same as the share that they

would be entitled to receive of an equivalent franked distribution to the trust or partnership

from the same source.

You must provide this distribution statement to your eligible members prior to the lodgment of

your tax return.

The distribution statement must contain the following information for it to be in the approved

form:

If the trust or partnership were directly issued with exploration credits from the greenfields minerals explorer it must include:  

the name of the entity (trust or partnership) that is providing the statement the member’s share of the amount of exploration credits that were issued to the trust

or partnership by the greenfields minerals explorer under Subdivision 418-E of ITAA 1997 for the income year

the name and ABN of the greenfields minerals explorer that issued the exploration credits to the trust or partnership

a statement that the trust/partnership would, apart from subparagraphs 418-10(b)(ii) and (iii), have been entitled to a tax offset under Subdivision 418-B of the ITAA 1997 for the income year in relation to the exploration credit issued to it by the greenfields minerals explorer.

If the trust or partnership were indirectly entitled to exploration credits from another trust or partnership it must include:

the name of the entity (trust or partnership) that is providing the statement the member’s share of the amount of exploration credits under Subdivision 418-E of

ITAA 1997 for the income year the name and ABN of the greenfields minerals explorer that issued the exploration

credits that flowed indirectly to the entity through one or more trust/partnership a statement that the entity would, apart from subparagraphs 418-10(b)(ii) and (iii), have

been entitled to a tax offset under Subdivision 418-B of the ITAA 1997 for the income year in relation to the exploration credit that is taken to have been issued to it.

In each case, if the trust or partnership is distributing exploration credits from more than one

greenfields minerals explorer to a member, the trust or partnership must ensure that the

information in the statement it provides to the member (outlined above) are separately

itemised for each greenfields minerals explorer.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

62

If you are a trustee that is liable to tax under subsection 98(1), 98(2), 99(2), or 99(3) of the ITAA

1997, then you may be entitled to a tax offset for the exploration credits received that are not

distributed to your members.

Trust Return Statement of Distribution:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

63

Partnership Return Statement of Distribution:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

64

Country-by-Country reporting: phase 2


Legislative changes

The Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015 received Royal

Assent 11 December 2015.


Country-by-Country (CbC) reporting is part of a broad suite of measures to combat international tax avoidance through more comprehensive exchanges of information between countries. These measures also provide revised standards for transfer pricing documentation.

CbC reporting implements Action 13 of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Action Plan.

CbC reporting applies to particular types of significant global entities (SGEs) and consolidated groups with annual incomes of A$1 billion or more and:

requires the lodgment of three statements, the CbC report, local file and master file within 12 months after the end of their income tax year

Australian entities falling under the CbC reporting regime generally require local file lodging requirement as part of a consolidated group.


There are no specific CbC changes, however MYOB Tax provides for relevant data capture in

the international dealings schedule (IDS). It does not currently cover the preparation of

lodgment of the CbC report and associated files.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

65

Diverted profits tax (DPT)


Legislative changes

The Treasury Laws Amendment (Combating Multinational Tax Avoidance) Act 2017 received

Royal Assent on 4 April 2017.


Introduced in the 2016–17 budget as part of a package of measures designed to tackle

multinational tax avoidance, the diverted profits tax (DPT) aims to provide the ATO with greater

powers to deal with taxpayers who transfer profits to offshore related parties using contrived

arrangements to avoid Australian tax. The measure also aims to encourage large multinational

enterprises to provide sufficient information to the ATO to allow for the timely resolution of tax

disputes.

The DPT will impose a penalty rate of 40%. The tax rate applies to the amount of an Australian

tax benefit if it would be concluded that there was a principal purpose (a lower hurdle than

sole or dominant purpose) of obtaining an Australian tax benefit, or both to obtain an

Australian tax benefit and reduce foreign tax liabilities.

The DPT assessment process differs from current normal assessment processes. It will impose a

liability when an assessment is issued by the ATO, require upfront payment of any DPT liability,

and put the onus on taxpayers to provide information to the ATO to substantiate why the DPT

should not apply during a 12-month period.

The DPT:

applies only to significant global entities applies to income years that start on or after 1 July 2017 can apply to schemes entered into before 1 July 2017, that produce a tax benefit in an

income year starting on or after this date.

In broad terms, the new law applies if under the scheme, or in connection with the scheme:

the relevant taxpayer has obtained a tax benefit in connection with the scheme in an income year

a foreign entity, that is an associate of the relevant taxpayer, entered into or carried out the scheme or is otherwise connected with the scheme

the principal purpose, or one of the principal purposes of the scheme, is to obtain an Australian tax benefit or to obtain both an Australian and foreign tax benefit.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

66

The DPT will not apply (even if the principal purpose test is satisfied) if it is reasonable to

conclude that one of the following exemptions applies:

Australian income does not exceed A$25 million the sufficient foreign tax test is satisfied, requiring an increase in foreign tax liabilities from

the arrangement to be 80% or more of the corresponding reduction in the Australian tax liability

the sufficient economic substance test is satisfied, requiring income derived, received or made by each entity connected with the arrangement to reasonably reflect the economic substance of the entity’s activities in connection with the arrangements, and having regard to the Organisation for Economic Cooperation and Development’s (OECD) transfer pricing guidelines including the BEPS report dealing with Actions 8–10: Aligning Transfer Pricing Outcomes with Value Creation.

The DPT will not apply to a relevant taxpayer who is:

a managed investment trust a foreign collection investment vehicle with wide membership a foreign entity owned by a foreign government a complying superannuation entity a foreign pension fund.

The DPT also encourages multinationals to provide sufficient information to the ATO to allow

for timely resolution of tax disputes.


None.

CHANGES TO INDIVIDUAL RETURNS


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

68

Tax changes for individual returns

Medicare levy low-income threshold increase Forms affected I (mlv)

Legislative changes

None.


The Medicare levy low-income thresholds for singles, families, seniors and pensioners have

been increased for the 2017–18 income year.

The threshold increases mean that households will not pay the Medicare levy if their taxable

income is below the statutory low-income threshold.


We’ve updated MYOB Tax with the threshold values for 2017–18:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

69

Temporary budget repair levy fringe benefit tax changes – FBT rate sunset

Forms affected I

Legislative changes

The Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014 and the Fringe Benefits

Tax Amendment (Temporary Budget Repair Levy) Act 2014 received Royal Assent on 25 June

2014.


The temporary budget repair levy (TBRL) ceased to apply after 30 June 2017 so the 2017–18

assessment year will no longer include the additional 2% TBRL for income over $180,000.

Under the TBRL scheme, there was an additional 2% applied to fringe benefits tax from 1 April

2015 until 31 March 2017.


We’ve updated MYOB Tax to reverse the FBT increase, the changes include:

the FBT rate has been reduced from 49% to 47% tax rates have been updated the FBT ‘gross-up’ rates (type 1 and type 2) have been changed to the reduced FBT rate the FBT reduction factor applied to reportable fringe benefits amounts for non-exempt

employers for adjusted taxable income (ATI) has been changed from 0.51 to 0.53 tax rates and parameter tables have been updated the 2018 master tax rate tables for individuals and trustees have been updated all references to the TBRL have been removed.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

70

FBT changes and income tests for tax offsets

Forms affected I

Legislative changes

The Budget Savings (Omnibus) Act 2016 – Schedule 15 Fringe Benefits received Royal Assent

on 16 September 2016.

The Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016 received Royal



Changes to FBT will have an impact the way several income tax tests are conducted. From 1

July 2017, the reportable fringe benefits amount (RFBA) received from employers who are not

exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act

1986 will not be adjusted down when calculating entitlement to several tax offsets.

Section 57A references individuals performing duties for registered public benevolent

institutions, registered health promotion charities, some hospitals and public ambulance

services.

There is no change to the treatment of RFBA received from employers who are exempt from

FBT under section 57A of the FBT Assessment Act 1986, for example, hospitals.

From 1 July 2017, the RFBA adjustment (49%) is removed from the calculation of adjusted

taxable income (ATI).

ATI is used in the calculation of many entitlements including:

Net medical expenses tax offset (NMETO) Dependant (invalid and invalid carer) tax offset (DICTO) Dependant child for Medicare levy purposes Low-income superannuation tax offset (LISTO)

The RFBA adjustment (49%) is also removed from the calculation of rebate income, used to

determine eligibility for seniors and pensioners tax offset.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

71


In the individual income tax return, the reportable fringe benefits amounts will not be adjusted

down when performing the calculations in the ATI and rebate income at:

Item IT1, label W – Employers not exempt from FBT under section 57A of the FBTAA 1986

Spouse details section, label S – Employers not exempt from FBT under section 57A of the FBTAA 1986.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

72

Allocation of PAYG credits and payments received against overseas repayment levies


Legislative changes

The Education Legislation Amendment (Overseas Debt Recovery) Act 2015 and the Student

Loans (Overseas Debtors Repayment Levy) Act 2015 received Royal Assent on 26 November

2015.


Australians who have a Higher Education Loan Programme (HELP) debt and are residing

overseas will be required to make repayments against their debt. This initiative has been

further extended to Trade Support Loan (TSL) debtors.

Collection and recovery of these repayments will be based on the current regime existing for

those living in Australia. That is, an income-contingent repayment (known as an overseas levy)

made through the tax system.

Complimenting this change, PAYGW credits will be applied to income contingent loan amounts

before being applied against other non-RBA amounts (including income tax) of the entity.

Under these changes, the first repayment against any HELP debt and/or TSL will start on 1 July

2017. It will be based on worldwide income for the 2016–17 Australian income year (that is,

from 1 July 2016 to 30 June 2017). In addition, a taxpayer will be required to submit an overseas

travel notification if they meet certain criteria.

Similar to a taxpayer who is living and working in Australia, if a taxpayer lives and works

overseas and earns worldwide income that exceeds the minimum HELP and TSL repayment

thresholds, they will be required to make repayments against their loan.

The two main changes the Australian government has introduced means you must:

update your contact details and submit an overseas travel notification if you have an intention to, or already reside overseas, for 183 days or more in any 12 months

lodge your worldwide income or a non-lodgment advice.

These changes apply to new and existing HELP and TSL debts.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

73

After a taxpayer has reported their worldwide income, they will receive a notice confirming:

how much they owe or will be refunded the due date for payment.

HELP and TSL debt will continue to be indexed each year until it is paid. A taxpayer can make

additional voluntary repayments from overseas at any time to reduce the balance of their debt.

These repayments will not reduce any compulsory repayment or overseas levy obligations they

may have.


No changes to MYOB Tax as payment is already being calculated in the [F4] estimate.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

74

Cost of managing tax affairs

Forms affected I

Legislative changes

None.


Individuals can claim a deduction for the cost of managing tax affairs at label D10 on the

individual tax return (ITR). Amongst other things, label D10 includes deductible amounts for

ATO interest charges and litigation costs.

The D10 Cost of Managing Tax Affairs item will be split into three sub-components to provide

a more accurate representation of what is being claimed.

ATO interest can be either assessable or deductible:

assessable if the ATO pays interest, such as interest on over payment (IOP) or an amount of interest imposed is subsequently recouped or remitted

deductible if interest such as general interest charge (GIC) has been applied.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

75


D10 Cost of managing tax affairs

D10 has been split into three separate labels:

N – Interest charged by the ATO L – Litigation costs M – Other expenses incurred in managing your tax affairs

24 Other Income

Item 24 has been split into three separate labels:

Y – Category 1 income X – Category 2 income (ATO interest) V – Category 3 income


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

76

Tax deductions for personal superannuation contributions

Forms affected I (psc)

Legislative changes

The Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 received Royal



Before 1 July 2017, an income tax deduction for personal super contributions was only available

to people who earned less than 10% of their income from salary or wages.

From 1 July 2017, the 10% rule is removed. This allows most Australians aged under 75

(including those aged 65–74 who meet the work test) to claim an income tax deduction for any

personal super contributions made into an eligible super fund. These amounts will count

towards the individual’s concessional contributions cap, and be subject to 15% contributions

tax.

Individuals will still be required to lodge a notice of intent (NOI) to claim the deduction with

their super fund or retirement savings provider. This notice needs to be lodged before they

lodge their income tax return. Individuals must decide the amount they are going to deduct

before lodging the NOI. They can only claim a deduction for the amount on their notice.

Members of Commonwealth public sector superannuation schemes, untaxed funds such as a

constitutionally protected fund (CPF), or certain funds that offer defined benefit interests, will

not be eligible to claim a deduction for contributions made to these funds. Instead, if a member

wants to claim a deduction, they may choose to make their contribution to another eligible

superannuation fund.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

77


We’ve removed the 10% maximum earnings condition for claiming a personal superannuation

deduction (item D12 on the individual tax return).

In item D12, click label H to open the Personal superannuation contributions schedule (psc).

The 2017 psc schedule has a question confirming that superannuation contribution deductions

are less than 10%:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

78

We’ve removed the question confirming that superannuation contribution deductions are less

than 10% from the Personal superannuation contributions 2018 (psc) schedule:

Ensure that individuals know how claiming the deduction will impact their super contribution

caps. From 1 July 2017, the concessional contribution (CC) cap has been reduced to $25,000.

The CC cap includes any employer contributions, salary sacrifice and tax-deductible

contributions


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

79

Tax offset for spouse contributions – increase in income threshold

Forms affected I (ssc)

Legislative changes




The Tax offset for spouse contributions increase in income threshold. From 1 July 2017, the 18%

tax offset of up to $540 will be available for any individual, whether married or de facto,

contributing to the super account of a spouse whose income is up to $37,000.

This is an increase from the previous income threshold of $10,800.

The offset is gradually reduced for income above this level and completely phases out at an

income above $40,000.

Additionally, an individual will not be entitled to the tax offset when:

the spouse receiving the contribution has exceeded their non-concessional contributions cap for the relevant financial year

the spouse receiving the contribution has a total superannuation balance equal to or more than the general transfer balance cap ($1.6 million for 2017–18), immediately before the start of the financial year in which the contribution was made.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

80


Item T3 – Superannuation Contributions on behalf of your spouse has been updated with the

new income thresholds and the additional eligibility criteria with respect to the spouse’s

non-concessional contributions cap and total superannuation balance.

We’ve added two boxes to the 2018 Spouse Superannuation Contributions Offset (ssc)

schedule to confirm the additional eligibility criteria.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

81

Transfer balance cap

Forms affected I (pen)

Legislative changes




A cap has been placed on the amount of capital that can be transferred from concessionally

taxed accumulation phase accounts to tax-free retirement phase accounts. It applied from 1

July 2017, and the measure is attempting to limit the extent to which the retirement phase

interests of high wealth individuals attract an earnings tax exemption.

The cap is $1.6 million for the 2017–18 financial year. The cap will be indexed in $100,000

increments in line with the CPI. Individuals who have previously moved an amount into

retirement phase will receive a proportion of the indexation amount.

If an individual exceeds the transfer balance cap, they generally need to commute the excess

amount back to the accumulation phase. They will then be subject to excess transfer balance

tax on the excess transfer balance earnings that accrued while the person exceeded their

transfer balance cap.

However, in the following situations, it is known as a capped defined benefit income stream:

where a member of a fund has a defined benefit income stream where excess cannot be commuted, and the member is aged 60 or over, or

is in receipt of a reversionary income stream where the deceased was 60 or over at the time of death.

Subsequent tax treatments will apply from 1 July 2017, where the total of a taxpayer’s tax-free

component, taxed element, and untaxed element is above $100,000 per year will be

concessionally taxed.

For taxed and tax-free components, half of the income above the individual defined benefit cap will be included in the recipient’s assessable income and taxed at their marginal tax rate.

For untaxed components, the tax offset will be limited to their cap, and will not apply to untaxed-sourced benefits above the cap.

for combined taxed sourced and untaxed component income, the taxed portion is applied to the cap before the untaxed portion.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

82


Item 7 – Australian annuities and superannuation income streams

We’ve added label M – Assessable amount from capped defined benefit income stream to

item 7 to cater for the changes to the taxation of defined benefit income streams.

Item T2 –Australian superannuation income stream

Item T2 will remain unchanged. However, instructions will be updated to limit the amount of

tax offset on the untaxed element. The maximum amount that an individual can claim for the

2017–18 financial year is 10% of their cap on untaxed elements.

Click label S to open the Annuity and Super Income Stream Offset (pen) schedule.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

83

Reporting – taxable government grants and specified payments

Forms affected I (oly)

Legislative changes

Subdivision 396-B in Schedule 1 to the Taxation Administration Act 1953.


Reporting of government grants and payments is covered by table items 1 and 2 in section

396–55 of Schedule 1 to the Taxation Administration Act 1953.

New third-party reporting legislation is in place that requires government entities to report on

grants they pay to entities with an ABN and payments wholly or partly for the supply of

services.

The annual report from providers of the taxable government grants and specified payments to

the ATO is due for lodgment by 28th August 2018, covering 1 July 2017 to 30 June 2018.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

84


MYOB’s Import from Tax Office pre-filled report will be updated in a later release, to include

any taxable grants and specified payments to be included at item 24, label V – Other Income - Category 3.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

85

CHANGES TO COMPANY RETURNS


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

87

Tax changes for company returns

Tax rate reduction for companies who qualify as base rate entities

Forms affected C

Legislative changes (a)

The Treasury Laws Amendment (Enterprise Tax Plan) Act 2017 received Royal Assent on 19 May

2017.


The corporate tax rate will be reduced to 27.5% (from 30%) for entities with an aggregated turnover of less than:

$25 million for the 2017–18 income year $50 million for the 2018–19 income year

Companies will self-assess their eligibility for the lower corporate tax rate.

From 2017–18, a company entity eligible for the lower corporate tax rate will be referred to as a

base rate entity (BRE).

The corporate tax rate will be further reduced for BREs:

2024–25 income year – 27% 2025–26 income year – 26% 2026–27 income year – 25%


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

88


Company tax rates

The tabs Non-profit, RSA, PDF and Credit Unions reflect the changes to the base rate entity.

Non-profit companies

Retirement savings accounts (RSA)


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

89

Life assurance companies

Pooled development funds


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

90

Credit unions


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

91

Changes to the front cover

On the front cover section of the company tax return, at item 3 Status of Company, we’ve

added the question Is the taxpayer a Base Rate Entity? Y/N.

The eligibility test has been updated to check that base rate entity aggregated turnover

threshold is $25 million for the 2017–18 income year.

Press [Enter] to open the new Base Rate Entity - Eligibility Tests worksheet.

New worksheet: Base Rate Entity – Eligibility Tests

Y to both questions to qualify as a BRE.

If you press [Alt+S] at question 2 the Aggregate Turnover Worksheet opens.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

92

Aggregate Turnover Worksheet

When you’ve completed and saved this worksheet, if the Total Aggregated Turnover is less

than $25 million answer Y to question 2 on the Base Rate Entity - Eligibility Test worksheet. If it’s more than $25 million, answer N.

Calculation statement – gross tax calculation:

Where BRE eligibility is established, the auto-calculation of tax on taxable income calculates at

the reduced corporate tax rate for small business entities of 27.5%.

In the 2018 year, this applies to all annual turnover amounts under $25 million. For example, if

we assume a taxable income of $10 million:

Taxable Income $10 million X 0.275 = $2,750,000.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

93

Landcare and water facility offset brought forward from prior year

The landcare and water facility offset is a non-refundable carry forward offset that can be

found at label D in the Calculation statement.

Click label D to open the Non-refundable carry forward tax offsets window.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

94

Click Landcare and water facility tax offset brought forward from prior years to open the

Water Facility Offset worksheet:

The worksheet contains confirmation that the entity is a base rate entity, and the 27.5% rate

applies.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

95

Maximum franking credits

To work out the company tax rate you use when franking distributions, assume the aggregated

turnover will be the same as the prior income year.

If you were formerly a small business entity and have already issued your 2016–17 distributions

based on the 30% company tax rate, notify your members of the correct dividend and franking

credit amounts based on the 27.5% company tax rate.

You can do this by sending a letter or email to your members, or a revised distribution

statement. You also need to ensure the correct amounts are reflected in your franking account.

For more information, refer to PCG 2017/D7 Enterprise Tax Plan: small business over-franking in 2016–17 income year because of tax rate change.

https://www.ato.gov.au/law/view/document?docid=COG/PCG20177/NAT/ATO/00001

https://www.ato.gov.au/law/view/document?docid=COG/PCG20177/NAT/ATO/00001


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

96

Non-refundable R&D tax offset c/f from previous year

We’ve updated the R&D Calculator, validations and instructions for companies to use the 27.5%

tax rate in their calculations when they are a BRE.

Click label D Non-refundable R&D tax offset carried forward to next year, to open the Non-refundable R&D tax offset carried forward from previous year worksheet. If the company

is to be treated as a BRE, tick the Base rate entity checkbox.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

97

Extension of tax rate reduction

Legislative changes

The Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017 had its first

Senate reading on 12 February 2018.

This bill has not been passed yet, however the expectation is that it will be passed into law

sometime in June 2018.


Base rate entities

The bill will alter the definition of what a base rate entity is from 2017–18 onwards by replacing

the existing carrying on a business test with a passive income test.

Under the passive income test, companies that are generating more than 80% passive income

will not be eligible for the lower corporate tax rate.

Passive income includes items such as:

interest royalties rent non-portfolio dividends non-share dividends net capital gains.

In general, the following entities will still be considered BREs:

non-profit companies pooled development funds retirement savings account providers public trading trust.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

98

Tax rate reductions – franking credits

Legislative changes

The Treasury Laws Amendment (Enterprise Tax Plan 2) Bill 2017 had its first Senate reading on

12 February 2018. This bill has not been passed yet.


If the bill is passed, it would result in the corporate tax rates being gradually reduced.

Franking credits

The maximum franking credit that can be allocated to a corporate frankable distribution will be

based on that entity’s applicable corporate tax rate for imputation purposes (CTRFIP).

In simple terms this means that a company must frank their distributions for the current year

based on last year’s income.

For the 2017–18 income year, the corporate tax rate for imputation purposes will be:

27.5% if the company was a BRE last year, or is a BRE its first year of business 30%, but a franking credit rate for imputation purposes of 27.5% 30% for all other companies.

Substituted accounting periods

For a small business company with an early balancing substituted accounting period, the

reduced company tax rate will not apply to 2018 because its financial year started before 1 July

2017.

If the company is a standard or late balancer, the reduced company tax rate will apply to your

2018 income year because it started on or after 1 July 2017.


None.

TAX CHANGES FOR SUPERANNUATION & SELF MANAGED SUPER FUNDS


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

100

Tax changes for superannuation and SMSFs

Strengthening the integrity of income streams Forms affected F MS (xF)

Legislative changes



The Treasury Laws Amendment (2017 Measures No. 2) Act 2017: superannuation reform

package amending provisions received Royal Assent on 22 June 2017.


Transition to retirement income streams (TRIS) allows people who have reached their

preservation age to have access to their superannuation benefits without having to retire or

leave their job. A TRIS is essentially an account-based pension from which lump sum payments

can only be made in limited circumstances. It also has a maximum annual payment limit.

Like other income streams where a fund is liable to make TRIS payments, some or all of the

fund's income and capital gains may be treated as exempt current pension income (ECPI).

TRIS were intended to help older workers transition to retirement through reducing their

working hours and supplementing their lost salary income with a superannuation income

stream. In practice, TRIS have been used to reduce tax (including through the pension phase

earning tax exemption) without a reduction in working hours of recipients.

The intent of these changes is to ensure that TRIS were not accessed primarily for their tax

advantage, and still meet the objective of supporting people.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

101

Changes as at 1 July 2017 include:

The tax-exempt status of income from assets supporting a TRIS that is not in retirement phase has been removed. A TRIS is not in the retirement phase when the member has not reached age 65 or has not notified their fund that they have met any of the retirement, permanent incapacity or terminal illness conditions of release.

Earnings from assets supporting a TRIS not in the retirement phase will now be assessable income of the fund and will be taxed at 15% regardless of the date the TRIS commenced

Individuals will no longer be allowed to treat certain superannuation income stream payments as lump sums for tax purposes which currently makes them tax-free up to the low rate cap ($195,000).

Full or partial commutations of superannuation income streams will be treated as superannuation lump sums.

Lump sum payments will not count towards an individual’s annual minimum pension payments.

Superannuation funds and SMSFs must ensure that TRIS payments being accessed by the

taxpayer meet the general TRIS legislative intent:

need to ensure that the earnings on assets supporting a TRIS that is not in the retirement phase are not treated as tax exempt – they must be taxed at 15%

treat costs as deductible where the TRIS is not eligible for transitional purposes identify and report all TRIS accounts in accumulation phase to the ATO via:

Member account attribute service (MAAS) SMSF annual return.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

102


Fund return

We’ve made some instructional changes to provide details on the new legislative requirements

that removes the tax-exempt status of earnings that support a TRIS, when the TRIS is not in the

retirement phase. The areas changed are:

Fund return: section B – label Y SMSF return: section A – question 10 SMSF return: section B – label Y

In the SMSF return in sections F & G Member and supplementary member information, we

have added a new field TRIS Count to record the number of TRIS accounts in accumulation

phase.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

103

Removal of the existing anti-detriment provisions

Forms affected F MS

Legislative changes


Asset on 29 November 2016


Changes will remove the existing anti-detriment provision to ensure that there is a consistent

treatment of lump sum death benefits across all superannuation.

The ability for funds to claim a deduction for additional payments to eligible dependants when

a death benefit is paid has been removed.

The anti-detriment provision can result in a refund of a member’s lifetime superannuation

contribution tax payments into an estate, where the beneficiary is the dependant of the

member.

This measure commenced on 1 July 2017. Funds may include an anti-detriment payment and

claim a tax deduction for it as part of death benefit if a member dies on or before 30 June 2017.

The funds have until 30 June 2019 to pay the benefit. Funds cannot claim a deduction for an

anti-detriment payment as part of a death benefit if the member dies on or after 1 July 2017.

Currently, funds can pay an additional amount (the anti-detriment payment) to refund the 15%

contributions tax that has been paid by the deceased member over their lifetime. The fund can

then claim a deduction related to this amount in their income tax return.

The amendments repeal section 295485 (the anti-detriment deduction). This section allowed

complying superannuation and approved deposit funds an income tax deduction if a lump sum

superannuation benefit paid to benefit the spouse, former spouse or children of a member

following a member’s death was greater than it would otherwise have been to compensate for

tax payable on the contributions to the fund made for the member over the member’s lifetime.

[Schedule 9, item 3, section 295485].

The amendments also repeal section 320107 which provided an equivalent deduction to life

insurers under the same circumstances. [Schedule 9, item 3, section 320107].


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

104

The repeal applies in relation to lump sums that are paid because of the death of a member

where that member died on or after 1 July 2017. However, from 1 July 2019, it applies to all

benefits paid after this time, irrespective of whether the member died before 1 July 2017.

[Schedule 9, item 5].

This ensures that delays in the payment of a lump sum in respect of the death of a member in

the first two years after the repeal do not result in differences in income tax treatment.

However, limiting the transition period to two years avoids uncertainty and compliance costs

that would result from indefinitely retaining the income tax deduction in respect of members

that pass away prior to 1 July 2017 where payment of lump sums to beneficiaries is significantly

delayed.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

105


There are no changes to the income tax returns until 2019-20, when the deduction label will be

removed.

We’ve made some instructional changes to provide details on the new legislative requirements

that removes the ability for the anti-detriment deduction to be claimed where a member dies

on or after 1 July 2017 in:

Fund return: section C SMSF return: section G.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

106

Total superannuation balance

Forms affected MS (xF)

Legislative changes




Multiple superannuation changes that will be dependent on an individual’s total

superannuation balance (TSB). The TSB will be a 30 June balance amount reported by funds

each financial year.

The TSB will be used to determine eligibility for:

the unused concessional contributions cap carry-forward the non-concessional contributions cap and the two- or three-year bring-forward period the government co-contribution the tax offset for spouse contributions SMSF or small APRA funds to determine whether they can use the segregated assets

method to calculate exempt current pension income.

Balances of accumulation and retirement phase accounts will need to be reported by funds to

enable the ATO to determine an individual’s total superannuation balance (TSB).


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

107


APRA funds

There are no changes necessary for fund returns, however the legislation affects:

where the amount reported at the existing account balance label on the MCS:

if the total amount of the superannuation benefits that would become payable if the individual voluntarily caused the interest to end at that time there would be no additional reporting

Does not equal the definition of accumulation phase value or retirement phase value (i.e. does not include the realised value) then additional reporting is required to ensure the correct calculation of TSB

this additional reporting must be submitted on the Transfer Balance Account Report (TBAR) at or just prior to lodging the MCS.

the data required:

Accumulation phase value Retirement phase value.

For capped defined benefit income streams (CDBIS) starting on or after 1 July 2017 or CDBIS

(other than a market linked CDBIS) that was in existence prior to 1 July 2017, the events

reported on the Transfer Balance Account Report (TBAR) will be used to calculate an

individual’s TSB.

These events are required to be reported within 10 working days from the end of the month in

which the event occurred.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

108

SMSF returns

New labels will form part of the SMSF annual return from 2017–18 to allow the correct

calculation of TSB. This is due to the existing closing account balance not differentiating

accounts and potentially not including the disposal/realisation costs.

Sections F and G – Member and Supplementary member information

Three new labels make up the total of label S Closing Account Balance:

S1 – Accumulation phase account balance S2 – Retirement phase account balance Non CDBIS S3 – Retirement phase account balance CDBIS

Two new optional labels have been added to be used if the amounts reported in the

mandatory fields do not equal the definition of accumulation phase value or retirement phase

value i.e. does not include the realised value:

X1 – Accumulation phase value X2 – Retirement phase value


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

109

Transfer balance cap

Forms affected F MS (bw) (cgt)

Legislative changes




A cap has been placed on the amount of capital that can be transferred from concessionally

taxed accumulation phase accounts to tax-free retirement phase accounts. It applied from 1

July 2017 and the measure is attempting to limit the extent to which the retirement phase

interests of high wealth individuals attract an earnings tax exemption.

The cap is $1.6 million for the 2017–18 financial year. The cap will be indexed in $100,000

increments in line with the CPI. Individuals who have previously moved an amount into

retirement phase will receive a proportion of the indexation amount.

If an individual exceeds the transfer balance cap they generally need to commute the excess

amount back to the accumulation phase. They will then be subject to excess transfer balance

tax on the excess transfer balance earnings that accrued while the person exceeded their cap.

However, where a member of a fund has a defined benefit income stream where excess

cannot be commuted, and the member is aged 60 or over or is in is in receipt of a reversionary

income stream where the deceased was 60 or over at the time of death. This is now known as

a capped defined benefit income stream.

Tax will apply from 1 July 2017 where the total of a taxpayer’s tax-free component, taxed

element and untaxed element is above $100,000 per year:

taxed source (tax-free component plus the taxed element), half of the income above the individual defined benefit cap will be included in the recipient’s assessable income and taxed at their marginal tax rate

untaxed defined benefit income, the tax offset will be limited to their cap combination of taxed sourced and untaxed component income, the taxed portion is

applied to the cap before the untaxed portion.

CGT relief was also provided in certain circumstances for superannuation funds. Where a fund

decided to use the CGT relief, funds were required to notify the Commissioner on the

approved form (2016–17 CGT schedule) and lodge the schedule prior to the lodgement date of

the fund’s Income tax return for the 2016–17 year.

https://consult.treasury.gov.au/retirement-income-policy-division/superannuation-reform-package/supporting_documents/Exposure_Draft_Omnibus_Superannuation_Bill_Tranche_1.pdf


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

110

For the 2017–18 year where the fund has notified the Commissioner that they have a deferred

notional gain amount in their 2017 CGT schedule, funds will need to report that the deferred

notional gain has been realised.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

111


We’ve removed item 8, labels F and G from the CGT schedule as funds cannot elect to apply

the deferral for the 1 July 2017 financial year onwards.

2017 CGT Schedule (BW)

2018 CGT Schedule (BW)


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

112

At item 1, we’ve added label S Amount of capital gain previously deferred under transitional CGT relief for superannuation funds:

SUPERANNUATION CHANGES FROM 1 JULY 2017


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

114

Superannuation changes from 1 July 2017

Concessional contributions cap reduction

Legislative changes




The government lowered the annual cap on concessional (pre-tax) contributions to $25,000 for

the 2017–18 financial year. There is no longer an age-related cap.

For defined benefit fund (DBF) members, all defined benefit contributions will be included in

the concessional cap from 2017–18 year onwards.

The timeframe and process to release amounts from superannuation has also changed for

concessional contributions.

Reporting:

Member contributions statement (MCS)

Notional tax contributions (NTC) label – no change required to the reported amount Constitutionally protected funds (CPF) need to determine if they are required to report

notional taxed contributions at this label Defined benefit contributions (DBC) label – no change required to the reported

amount. The reported amount will continue to capture all defined benefit contributions. Will now be used for both division 293 tax and concessional contributions cap calculation. CPF need to determine if they are required to report DBC at this label

Where the NTC amount reported has been capped at the concessional contributions cap amount on the MCS, and the DBC label does not equal the uncapped NTC amount, additional reporting of the uncapped NTC amount is required on the transfer balance account report (TBAR). If the uncapped NTC amount exceeds $25,000 and a TBAR is not submitted with an NTC amount, it will be assumed that the client’s true uncapped NTC amount equals the DBC label amount.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

115

Transfer balance account report (TBAR)

When required, report uncapped NTC amounts on transfer balance account report just

prior to or at the time of lodging MCS. Refer to the transfer balance account electronic

reporting specifications for further information.

Member account attribute service (MAAS)

Where an account is eligible for grandfathering for excess concessional contributions

purposes, this information must be reported on the MAAS by selecting Y in the relevant

field. The ATO will use this data to apply specific capping to concessional contributions.

Releasing money

New streamlined release authorities cover the process to release money for concessional

contributions.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

116

Non-concessional contributions cap reduction

Legislative changes




The annual non-concessional contributions cap has been lowered to $100,000 (from $180,000)

for 2017–18. Non-concessional contributions made by individuals with a total superannuation

balance (TSB) of more than the general transfer balance cap ($1.6 million in 2017–18) will be in

excess.

Individuals under age 65 will generally be eligible to bring forward 2 years of non-concessional

contributions ($300,000 over 3 years).

An individual’s TSB on the day prior to the period will determine the bring forward amount that

can be triggered. A TSB of $1.4 million or above and below $1.5 million limits the bring forward

amount ($200,000 over 2 years).

The timeframe and process to release amounts from superannuation has also changed for

non-concessional contributions.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

117

Five-year carry forward of concessional contribution cap

Legislative changes




From 1 July 2018, individuals with a total superannuation balance less than $500,000 can make

catch-up concessional contributions.

Individuals will be able to access their unused concessional contribution cap on a rolling basis

for five years. Amounts that have not been used after five years will expire. The 2019–20

financial year will be the first year that a concessional cap will be increased by unused

concessional contributions from the 2018–19 financial year.

Existing fund reporting of concessional contributions will be used to determine whether

unused concessional amounts exist for an individual for a financial year.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

118

First home super saver scheme (FHSS)

Legislative changes


Act 2017 and the First Home Super Saver Tax Act 2017 received Royal Assent on 13 November

2017.


The FHSS scheme allows a taxpayer to save money for their first home within their

superannuation fund. This will help first home buyers save faster with the concessional tax

treatment within super.

From 1 July 2017 a taxpayer can make voluntary contributions into their superannuation fund

under the following conditions:

concessional contributions (including salary sacrifice) is taxed at 15% non-concessional contributions all contributions are subject to existing superannuation contribution caps contributions can be made to multiple funds contributions to defined benefit funds or constitutionally protected funds are not eligible

for FHSS.

Note: FHSS is a scheme to access funds and not an account.

From 1 July 2018 the voluntary contributions together with the associated earnings can be

released to assist with the purchase of a first home.

First home super saver scheme (FHSS) releases are based on application and are subject to the

following:

the maximum FHSS release amount outlined in the FHSS determination there is a limit of $15,000 against contributions for any one year (together

with earnings) the maximum FHSS withdrawal is $30,000 (together with earnings) First-in first-out processing and non-concessional contributions take precedence a single FHSS release application restriction FHSS releases are subject to ATO withholding and will be taxed at the taxpayers marginal

rate (including Medicare) less a 30% tax offset a catch for some taxpayers may be the allocation of FHSS funds against other

commonwealth debt before release an ATO service processing time of up to 12 working days will apply the fund may also apply additional fees or changes


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

119

a FHSS release does not affect the calculation of concessional or non-concessional contributions for cap determination purposes for the relevant year

unused FHSS release amounts must be repaid and are subject to a 20% FHSS tax.


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

120

Division 293 threshold reduction

Legislative changes




From 1 July 2017, the division 293 income threshold for 2017–18 has been reduced to $250,000

(down from $300,000).

High-income earners pay tax on their concessional superannuation contributions at 30% above

this threshold.


MYOB Tax calculators have been changed to reflect the new threshold value.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

121

Streamlining superannuation release authorities

Legislative changes




The ATO have introduced additional streamlining of superannuation release authorities with

electronic forms processing on the portal.

These changes move processing to a single combined approach and have a variable

implementation impact.

2013–14 financial year onwards

Excess concessional contributions determinations and amended determinations Excess non-concessional contributions determinations and amended determinations Excess non-concessional contributions tax and amended assessments


Division 293 due and payable tax assessments and amended assessments Division 293 deferred debt assessments and amended assessments


First home super saver scheme


None.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

122

Innovative retirement income stream products

Legislative changes




From 1 July 2017, the government has removed tax barriers to the development of innovative

retirement income stream products by extending the earnings tax exemption to new lifetime

products such as deferred products and group self-annuities, as well as providing a

streamlined process for product providers to deal with all relevant government entities when

developing a new product.

The intent of the measure is to provide a greater choice and flexibility for retirees to enhance

their standard of living in retirement.

The standards and definitions of these innovative retirement income stream products are set

out in regulation 1.06A of the Superannuation Industry (Supervision) Regulations 1994.

Information for fund managers

Funds are to advise the ATO of all innovative income stream products using the member

account attribute service (MAAS). These products need to be reported in the same way as

other superannuation products in relation to:

total superannuation balance $1.6 million transfer balance cap contribution caps (concessional and non-concessional).

This reporting will include the:

value of each account in accumulation phase as at 30 June each year value of annuity/pension account for transfer balance cap purposes at the time the

account becomes eligible for the earnings tax exemption.


None.

BUDGET COMMENTARY


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

124

Budget commentary

Individuals

A new seven-year personal income tax plan

This will be implemented in three steps:

Step 1 – Low and middle-income tax offset to be introduced

A low and middle-income tax offset (LMITO) will be introduced as a non-refundable tax offset

of up to $530 per year, to resident low and middle-income taxpayers from 2018–19 to 2021–22.

The LMITO will provide a benefit of up to $200 for taxpayers with taxable income of $37,000

or less.

For taxable incomes between $37,000 and $48,000, the value of the offset will increase at a rate of three cents per dollar to the maximum benefit of $530

Taxable incomes from $48,000 to $90,000 will be eligible for the maximum benefit of $530 Taxable incomes from $90,001 to $125,333, the offset will phase out at a rate of 1.5 cents

per dollar.

The LMITO will be received as a lump sum on assessment after an individual lodges their tax

return. The benefit of the LMITO is in addition to the existing low-income tax offset.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

125

Step 2 – Bracket creep relief for middle-income taxpayers

Middle-income taxpayers will be provided relief for bracket creep in phases:

from 1 July 2018, the top 32.5% threshold will increase from $87,000 to $90,000 from 1 July 2022, the low-income tax offset will increase from $445 to $645, and the 19%

bracket will be increased from $37,000 to $41,000 to lock in the benefits of the LMITO in Step 1

the increased low-income tax offset will be withdrawn at a rate of 6.5 cents per dollar for incomes between $37,000 and $41,000, and at a rate of 1.5 cents per dollar for incomes between $41,000 and $66,667

from 1 July 2022, the top 32.5% threshold of the 32.5% bracket will be further increased from $90,000 to $120,000.

Step 3 – Removing the 37% personal income tax bracket

The 37% tax bracket will be removed from 1 July 2024.

From 1 July 2024, the 32.5% tax bracket threshold will increase from $120,000 to $200,000.

Taxpayers will pay the top marginal tax rate of 45%for taxable incomes over $200,000, and the

32.5% bracket will apply to taxable incomes of $41,001 to $200,000. This is illustrated in the

table below:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

126

Medicare levy – low income thresholds to increase

The Medicare levy low-income thresholds for singles, families, seniors, and pensioners will be

increased from the 2017–18 income year:

Retaining the Medicare levy at 2%

The proposed increase to the Medicare levy from 2% to 2.5% of taxable income from 1 July

2019 will not go ahead. Consequential changes to other tax rates that are linked to the top

personal income tax rate, such as the fringe benefits tax rate, will also not go ahead.

Income tax exemption for certain veteran payments

Supplementary amounts paid to a veteran, and full payments made to the spouse or partner of

a veteran who dies, are exempt from income tax from 1 May 2018.

License schemes to license an individual’s fame or image targeted

From 1 July 2019, all remuneration (including payments and non-cash benefits) provided for the

commercial exploitation of a person’s fame or image will be included in the assessable income

of that individual.

High-profile individuals (such as sportspeople and actors) can currently license their fame or

image to another entity such as a related company or trust. Income for the use of their fame or

image goes to the entity that holds the licence. This creates opportunities to take advantage of

different tax treatments and facilitates misreporting and incorrect tax outcomes.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

127

Businesses

R&D tax incentive changes

The calculation for entities claiming the R&D tax incentive will change for income years

beginning on or after 1 July 2018.

Also, a maximum cash refund for smaller R&D claimants will be capped at $4 million per

financial year. A smaller R&D claimant is an entity with aggregated annual turnover below $20

million.

The changes for calculating the R&D tax incentive are based around an R&D intensity

percentage for each entity. The R&D intensity percentage is based on the amount of

R&D-related expenditure as a percentage of total company expenditure. The lower the R&D

intensity percentage for the entity, the lower the maximum available tax offset.

Currently there is a limit on which a company can claim the accelerated rates for the R&D tax

incentive. Above this limit, the R&D tax incentive can still be claimed but only at the entity's

corporate tax rate. Also, the maximum eligible expenditure to get the concessional rates will

rise from $100 million per entity per year to $150 million.

Companies with annual turnover above $20 million

Currently

A 38.5% non-refundable tax offset is available with a minimum eligible R&D expenditure of

$20,000 per year.

Proposed

Four levels of non-refundable tax offset based on an R&D intensity percentage and the entity's

corporate tax rate.

40% or 42.5% offset if more than 10% of total expenditure relates to R&D 36.5% or 39% offset if R&D intensity percentage is between 5% and 10% 34% or 36.5% offset if R&D intensity percentage is between 2% and 5% 31.5% or 34% offset if R&D intensity percentage is between 0% and 2%.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

128

Companies with annual turnover less than $20 million.

Currently

A 43.5% refundable tax offset is available with a minimum eligible R&D expenditure of $20,000

per year.

Proposed

A refundable tax offset of 13.5% percentage points above the entity's corporate tax rate. This

will mean no change for some companies as the refundable tax offset will remain 43.5%.

However, base rate entities that have a lower corporate tax rate of 27.5% will now have a

maximum refundable tax offset of 41%.

Also, it is proposed that the maximum cash refund available is $4 million. Any additional

refunds past this amount can be carried forward to later income years.

$20,000 immediate asset write-off extended

Businesses with an aggregated turnover of less than $10 million will continue to have access to

the $20,000 instant asset write-off for another 12 months. A small business will get an

immediate deduction for assets costing less than $20,000, and installed and ready for use

before 30 June 2019.

Also, small business depreciation pools valued under $20,000 as at 1 July 2018 can be

immediately written off in the 2018–19 income year.

The current lock-out laws for simplified depreciation rules, which prevent small businesses

from re-entering the pooling rules for five years if they opt out, will continue to be suspended

until 30 June 2019.

Division 7A UPE rule strengthened – major reform delayed

Division 7A of ITAA 1936 will be amended to clarify the circumstances in which it applies to

unpaid present entitlements (UPEs), where a related private company becomes entitled to a

share of trust income as a beneficiary, but has not been paid that amount. The amendments

will apply from 1 July 2019. Division 7A is an integrity rule that requires benefits provided by

private companies to related taxpayers to be taxed as dividends unless they are structured as

division 7A complying loans. This measure will ensure the UPE is either required to be repaid to

the private company over time as a complying loan or subject to tax as a dividend.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

129

The start date of targeted amendments to division 7A will be deferred from 1 July 2018 to 1 July

2019. Those reforms, announced in the 10-year enterprise tax plan in the 2016–17 budget, will

enable all division 7A amendments to be progressed as part of a consolidated package.

Deductions for vacant land to be denied

From 1 July 2019, tax deductions will not be allowed for expenses associated with holding

vacant land.

This is an integrity measure to address concerns that deductions are being improperly claimed

for expenses, such as interest costs related to holding vacant land where the land is not

genuinely held for the purpose of earning assessable income.

The measure will apply to land held for residential or commercial purposes. However, the

carrying on a business test will generally exclude land held for commercial development.

Deductions that are denied will not be able to be carried forward for use in later income years.

Expenses for denied deductions that would ordinarily be a cost base element (such as

borrowing expenses and council rates) may be included in the cost base of the asset for capital

gains tax (CGT) purposes when sold. However, deductions denied for expenses that would not

ordinarily be a cost base element would not be able to be included in the CGT cost base.

The measure will not apply to expenses associated with holding land that are incurred after:

a property has been constructed on the land, it has received approval to be occupied and is available for rent, or

the land is being used by the owner to carry on a business, including a business of primary production.

No small business CGT concessions for assignment of partnership rights

The small business CGT concessions will no longer be available to partners that alienate their

income by creating, assigning or otherwise dealing in rights to the future income of a

partnership.

The small business CGT concessions assist owners of small businesses by providing relief from

CGT on the disposal of assets related to their business. However, some taxpayers, including

large partnerships, can inappropriately access these concessions in relation to their assignment

of a right to the future income of a partnership to an entity, without giving that entity any role

in the partnership. The measure applies from 7.30pm (AEST) on 8 May 2018 for small business

CGT concessions in relation to the assigned rights.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

130

Non-compliant payments to employees and contractors no longer deductible

Businesses will no longer be able to claim deductions for payments to employees where they

have not met their PAYG obligations. This includes where the employer is required to withhold

PAYG from gross payments but fails to report or remit it to the ATO.

Additionally, the deduction for businesses on certain payments to contractors that have not

met PAYG obligations will be removed. Currently, if a contractor does not quote an ABN in a

business-to-business transaction, the purchaser is required to withhold an amount at the top

marginal tax rate and remit this amount to the ATO. Failure to do this correctly will render the

entire payment non-deductible. These measures will take effect from 1 July 2019.

Significant global entity definition broadened

The definition of a significant global entity (SGE) will be amended to include members of large

multinational groups headed by private companies, trusts and partnerships. It will also include

members of groups headed by investment entities.

The current definition applies only to an entity that is a member of a group headed by a public

company or a private company required to provide consolidated financial statements.

The measure will also ensure the Commissioner’s power to determine an entity to be an SGE

parent operates as intended. The SGE definition identifies entities that are required to prepare

country-by-country (CbC) reports and is used to determine entities that may be subject to

Australia’s multinational tax integrity rules, such as the multinational anti-avoidance law (MAAL)

and the diverted profits tax (DPT). The measure will apply to income years starting on or after 1

July 2018.

Tightening of thin capitalisation rules

The thin capitalisation rules will be amended to require entities to align the value of their assets

for thin capitalisation purposes with the value included in their financial statements.

This measure will apply to income years starting on or after 1 July 2019, and all entities must

rely on the asset values contained in their financial statements for thin capitalisation purposes.

Valuations made before 7.30pm (AEST) on 8 May 2018 may be relied on until the beginning of

an entity’s first income year starting on or after 1 July 2019.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

131

Consolidated groups and multiple entry consolidated groups that are foreign controlled, that in

turn control a foreign entity themselves, will be treated as both outward and inward

investment vehicles for thin capitalisation purposes. This measure will also apply to income

years starting on or after 1 July 2019. This change is intended to ensure that inbound investors

cannot access tests that are only intended for outward investors.

Tax exempt entity loans

Tax exempt entities that become taxable after 8 May 2018 will not be able to claim tax

deductions that arise on the repayment of the principal of a concessional loan.

The deductions arise due to unforeseen complex interactions between the taxation of financial

arrangements rules and the rules dealing with deemed market values for tax exempt entities

that become taxable. Concessional loans entered into by tax-exempt entities that become

taxable will be required to be valued as if they were originally entered into on commercial

terms. This is an integrity measure that protects the revenue base

50% CGT discount removed for MITs and attribution MITs at the trust level

Managed investment trusts (MITs) and attribution MITs (AMITs) will be prevented from

applying the 50% CGT discount at the trust level. This measure will apply to payments made

from 1 July 2019.

The measure will prevent beneficiaries who are not entitled to the CGT discount from getting a

benefit from the CGT discount being applied at the trust level. It will ensure that MITs and

AMITs operate as genuine flow through tax vehicles, so that income is taxed in the hands of

investors, as if they had invested directly.

MITs and AMITs that derive a capital gain will still be able to distribute this income as a capital

gain that can be discounted in the hands of the beneficiary.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

132

Anti-avoidance rules for circular trust distributions extended to family trusts

A specific anti-avoidance rule that applies to closely held trusts engaging in circular trust

distributions will be extended to family trusts.

Currently, where family trusts act as beneficiaries of each other in a round-robin arrangement,

a distribution can be ultimately returned to the original trustee, in a way that avoids any tax

being paid on that amount.

This measure will better enable the ATO to pursue family trusts that engage in these

arrangements by extending the specific anti-avoidance rule, imposing tax on such distributions

at a rate equal to the top personal tax rate plus the Medicare levy. The measure will apply from

1 July 2019.

Testamentary trusts and injected assets

From 1 July 2019, the concessional tax rates available for minors receiving income from

testamentary trusts will be limited to income derived from assets that are transferred from the

deceased estate, or the proceeds of the disposal or investment of those assets.

Currently, income received by minors from testamentary trusts is taxed at normal adult rates

rather than the higher tax rates that generally apply to minors. However, some taxpayers can

inappropriately obtain the benefit of this lower tax rate by injecting assets unrelated to the

deceased estate into the testamentary trust.

The measure will clarify that minors will be taxed at adult marginal tax rates only in respect of

the income a testamentary trust generates from assets of the deceased estate (or the proceeds

of the disposal or investment of these assets).


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

133

Superannuation

Increased membership of SMSFs

New and existing SMSFs and small APRA funds will be allowed to have a maximum of six

members from 1 July 2019. Currently, the maximum allowable number of members in an SMSF

is four.

Three-yearly audit cycle for some SMSFs

The annual audit requirement for SMSFs will be changed to a three-yearly requirement for

SMSFs with a history of good record keeping and compliance. SMSF trustees that have a

history of three consecutive years of clear audit reports and timely lodgments of the fund’s

annual returns will qualify. This measure will start on 1 July 2019.

Preventing inadvertent concessional cap breaches

Individuals whose income exceeds $263,157, and have multiple employers, will be able to

nominate that their wages from certain employers are not subject to the superannuation

guarantee (SG) from 1 July 2018.

The measure is intended to ensure eligible individuals can avoid unintentionally breaching the

$25,000 annual concessional contributions cap due to multiple compulsory SG contributions.

Employees using this measure may receive additional income that will be taxed at marginal tax

rates.

Improving integrity of personal contributions deductions

Individual income tax returns will be modified to include a checkbox for individuals with

personal superannuation contributions to confirm that they have complied with the

requirements to submit a notice of intent (NOI) where they intend to take a tax deduction for

the contributions.

Where individuals take deductions for their personal superannuation contributions, but do not

submit the required notice of intent, it results in superannuation funds not applying the 15% tax

to their contribution and no tax is paid on it.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

134

Super work test exemption for recent retirees

An exemption from the work test for voluntary contributions to superannuation will be

introduced from 1 July 2019 for people aged 65–74 with superannuation balances below

$300,000, in the first year that they do not meet the work test requirements.

The work test exemption will give recent retirees flexibility to get their financial affairs in order

in the transition to retirement. Currently, the work test restricts the ability to make voluntary

superannuation contributions for those aged 65–74, to individuals who self-report as working a

minimum of 40 hours in any 30-day period in the financial year.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

135

Black economy measures

Reforms to combat illegal phoenixing and black economy

The government will reform the corporations and tax laws and provide the regulators with

additional tools to assist them to deter and disrupt illegal phoenix activity.

The package includes reforms to:

introduce new phoenix offences to target those who conduct or facilitate illegal phoenixing prevent directors improperly backdating resignations to avoid liability or prosecution limit the ability of directors to resign when this would leave the company with no directors restrict the ability of related creditors to vote on the appointment, removal or replacement

of an external administrator extend the Director Penalty Regime to GST, luxury car tax and wine equalisation tax,

making directors personally liable for the company’s debts expand the ATO’s power to retain refunds where there are outstanding tax lodgments.

Taxable payments reporting system to be expanded

The taxable payments reporting system (TPRS) will be expanded to the following industries

from 1 July 2019:

security providers and investigation services road freight transport computer system design and related services.

The TPRS requires businesses to report to the ATO any payments made to contractors during

an income year. This additional reporting to the ATO is in the form of an annual report, and

puts these payments in line with payments made for salaries and wages to employees. As the

report is a yearly report for years starting 1 July 2019, the first annual report will be required in

August 2020. These reporting requirements are identical to ones already in place for payments

to contractors in the building and construction industry, as well as payments in the cleaning

and courier industries, starting 1 July 2018.

Large government contract tenders required to be tax compliant

Businesses seeking to tender for large Australian government contracts will be required to

provide information on the status of their tax obligations. Under the proposed arrangements,

contracts over $4 million (including GST) will be affected.

PRACTIONER LODGMENT SERVICE (PLS)


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

137

Practitioner lodgment service (PLS) The practitioner lodgment service (PLS) started to replace the ATO's electronic lodging system

(ELS) early in 2017. This is a mandated change and all standard 2018 tax returns will now be

managed through PLS.

PLS sends standard business reporting (SBR) messages using a secure connection, to the ATO's

SBR service.

PLS is a more interactive environment than ELS, and will enable the ATO to further extend and

enhance their interactive services.

The ATO is planning to retire the ELS service for all forms from 2017 onwards, in December

2018.

How to use PLS

Check the tax seminar video for detailed instructions for using PLS and the MYOB Lodgment

Manager. We also have our online help to help you with:

Setting up your system for PLS Lodging returns using PLS

http://adhelp.myob.com/AU/PLS/

http://help.myob.com/wiki/x/vDSEAQ


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

138

PLS lodgment flow

ATO PRE-FILL FOR INDIVIDUAL RETURNS


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

140

ATO pre-fill for individual returns We introduced a new pre-fill feature for individual tax returns in MYOB Tax 2017.3.

Pre-fill manager enables you to download pre-fill reports for clients using PLS. You can view

these reports in PDF format and populate the pre-fill information into a client's Tax return.

This feature is only available for individual returns. Pre-fill manager:

uses an interactive pre-fill request and download option can process either for an individual client or for a selected client list (clients must have a tax

file number assigned) reports are stored locally according to practice configuration integrates with MYOB Document Manager (DM) if installed has a simple point and click option to pre-fill downloaded data into tax returns and:

will be successful for returns that are rolled over and ready to pre-fill ATO pre-fill data cannot be edited but can be deleted at the individual schedule level the ATO requires pre-fill data to be explicitly accepted each pre-fill item is considered to be a new line entry - not matched to existing data pre-fill data does not roll-forward, it is designed to be completely refreshed will save you around 3–5 minutes per return.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

141

What data will be pre-filled?

Salary and wages Private health insurance Government payment Employee share ATO interest Bank interest Dividends Averaging - PP Averaging - Div 405 Managed fund Higher education Pension - non super ETP Super income stream Super lump sum

How do I use pre-fill manager?

For more detailed help, watch the tax seminar video and check our Pre-fill Manager online

help.

http://help.myob.com/wiki/x/gzSEAQ


SUPPORT MATTERS


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

143

Support Matters

24/7 access to Knowledge Base and help

Check out our new improved Knowledge Base

The Knowledge Base (KB) should be the first place to investigate when you come across an

error message, or if something isn’t working quite right. The Knowledge Base contains many

articles providing useful information and step-by-step instructions. We’ve given the Knowledge

Base a facelift – check our step-by-step guide to see how to navigate your way round.

How to search the Knowledge Base

Log in to the client support website at my.myob.com.au to search the Knowledge Base:

You’ll be directed to a new landing page, select a product from the drop-down and enter your search text:

http://help.myob.com/wiki/display/supps/Using+the+knowledge+base

https://my.myob.com.au/pages/login.aspx


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

144

Refine your search using Filter by:

The new style articles are easy to navigate:


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

145

How do I use [F1] help?

Press [F1] when you are anywhere in AE/AO and it will go to our new-look Tax 2018 online

help. For example, press [F1] when you are in the Pref-fill Manager tab:

You will be directed to our Pre-fill Manager online help page:

http://help.myob.com/wiki/x/faqyAQ

http://help.myob.com/wiki/x/faqyAQ



…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

146

Training

Check out our new MYOB Academy where we have an extensive catalogue of free MYOB courses, to help you get the most out of your software.

Contact your client manager if you’d like to book specific training.

Ask a colleague

If there are others in your office using the same software, ask if they can answer your questions. Often your office expert can quickly explain how the software is implemented for your business.

FAQs from our support desk

Most popular KB articles

How to restart the SBR Sender Service

Refer to KB 38335 The MYOB Tax SBR server sender runs on the server Controlled through Windows Services Manager We recommend you set up a desktop shortcut

PLS lodging - Troubleshooting returns stuck as transmitting or transmitted

Refer to KB 38226 Knowledge Base article will assist with checking these returns In some cases correction will require MYOB Support assistance

Machine Name not unique

Refer to KB 27473 This occurs in a situation where the system has detected a workstation conflict There can be various reasons for this situation Terminal server environments generally require specific launch configuration

https://academy.myob.com/

http://help.myob.com/wiki/x/NKuyAQ

http://help.myob.com/wiki/x/0QN3AQ

http://help.myob.com/wiki/x/dwl3AQ


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

147

How to distribute a foreign tax credit from a trust

Issue

When distributing a foreign tax creditt (FTC) via the [F4] distribution function, it does not

populate the foreign income tax offset at item 23 label Z.

Impact

Overlapping of the FITO $1,000 rule for individuals.

Solution

Modify the estimate generation by switching on the tax tables for the trust and reverting the

answers back when completed.

Additional details are available in the knowledge base article KB 33905.

Workflow

1 On the front cover answer Y to the question ‘'Is any tax payable by the trustee’.

2 Select applicable Tax Table 9.

3 Navigate to and click in item 23 label Z then press [F4] to process the distribution.

4 At the distribution tab, complete the distributions for all beneficiaries.

5 Finish by reverting the changes made at steps 1 & 2 back to the original values.

http://help.myob.com/wiki/x/TR6EAQ


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

148

How to distribute an overall trust loss between trusts (V335 error)

Issue

Trust A has a capital gain together with an income loss, and the overall position of trust A is a gain

This gain is now being distributed to trust B, which has a capital loss greater than the gain being distributed from trust A

The net result of the distribution will be an overall loss for trust B.

Impact

Validating trust B will produce a V335 error This is because MYOB Tax immediately offsets the capital gain against the capital loss, and

the validation check assumes that trust B has only received a loss from trust A.

Solution

In trust B, remove the loss from item 8, then add the loss amount to the losses schedule.

Workflow

1 Go to the income tab item 8, and update label R to NIL.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

149

2 On the deductions tab at item 25 enter NIL.

3 Create a BP losses schedule.

4 Include the income losses incurred this year at part A.

5 Complete the reconciliation at part F.

KEY DATES & SUPPORT CONTACT DETAILS


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

151

Key dates and support contact details

MYOB Tax 2018.0 release date

MYOB Tax 2018.0 will be available for download on my.myob.com.au from Friday 22 June 2018.

ATO ELS gateway

Will continue to accept 2018 Activity Statements.

ATO availability

ATO won’t be processing tax returns on Saturday 23 June and Sunday 24 June, because they’ll be updating their systems in preparation for Tax Time 2018.

ATO PLS lodgments

Lodgment of 2018 returns will be accepted by the ATO from Monday 25 June 2018.

ATO PLS processing

ATO will start processing 2018 returns from Friday 6 July 2018 Processing continues as usual for 2017 and prior year tax returns.

ATO refunds

Taxpayers will receive 2018 tax refunds from Tuesday 17 July 2018.

https://my.myob.com.au/Ad/pages/ProductDownloads.aspx


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

152

Getting support from MYOB This section lists the MYOB client support contact details for the 2018 tax season. It also

outlines the recommended steps you should follow to get the most from MYOB client support.

Submit a support request

You can log in to the MYOB client support website at my.myob.com and follow the steps to submit a support request.

Contact details

Website: my.myob.com Phone: 1300 555 666 Email: [email protected]

Extended support hours for tax season

Monday to Friday 8:30am–7:00pm AEST 25 June 2017 to 10 August 2018 Saturdays 10:00am–3:00pm AEST 30 June and 7 July 2018

Online community forum for accountants

myob.com.au/AEforum myob.com.au/AOforum

End of financial year hub

myob.com/au/accountants-and-partners/support/end-of-financial-year

http://www.my.myob.com/

http://www.my.myob.com/

mailto:[email protected]

http://www.myob.com.au/AEforum

http://www.myob.com.au/AOforum

http://www.myob.com/au/accountants-and-partners/support/end-of-financial-year

APPENDIX A TAX RATE TABLES


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

154

Appendix A – 2018 tax rates

Resident individual 2017–18

Taxable income Tax on taxable income % on excess (marginal rate)

$18,200 Nil 19%

$37,000 $3,572 32.5%

$87,000 $19,822 37%

$180,000 $54,232 45%

The 2% Medicare levy is not included in the rates above. The Medicare levy surcharge of between 1% and 1.5% is not included in the rates above. The 2% TBRL ceased to apply for taxable income exceeding $180,000 from 1 July 2017.

Non-resident individual 2017–18


Nil Nil 32.5%

$87,000 $28,275 37%

$180,000 $62,685 47%*

∗ The 2% TBRL ceased to apply for taxable income exceeding $180,000 from 1 July 2017. ∗ The 2% Medicare levy does not apply to non-residents.

Unearned income of resident minors (under 18 years)

Unearned income Tax payable

0–$416 NIL

$417–$1,307 66% of the amount over $416

Over $1,307 45% of the total amount


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

155

Unearned income of non-resident minors (under 18 years)

Unearned income Tax payable

0–$416 32.5%

$417–$663 66% of the amount over $416

Over $663 45% of the total amount

Tax rates for working holiday makers (WHMs) from 1 January 2017

Taxable income of WHM New marginal tax rate

0–$37,000 15%

$37,001–$87,000 32.5%

$87,001–$180,000 37%

$180,001 + 45%


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

156

Medicare levy 2017–18

Category of Taxpayer

No levy payable if taxable income (or family income) does not exceed…

Reduced levy payable if taxable income (or family income) is within the range (inclusive)…

Ordinary rate of levy payable where taxable income (or family income) equals or exceeds…

Single $21,980 $21,980–$27,475 $27,476

Married

(without child)

$37,089 $37,089–$46,361 $46,362

Single SAPTO $34,758 $34,758–$43,447 $43,448

Married SAPTO $48,385 $48,385–$60,481 $60,482

For each dependent child, add $3,406 to the lower limit or $4,257 to the upper limit. The figures applicable to married taxpayers also apply to taxpayers who would be entitled

to a sole parent rebate if entitlement to that rebate had not been restricted. Where there are more than six dependent children or students, add $4,195 for each extra

child or student to the upper limit.

Medicare levy surcharge 2017–18

Base tier Tier 1 Tier 2 Tier 3

Single threshold $90,000 $105,000 $140,000 $140,001 +

Family threshold $180,000 $210,000 $280,000 $280,001 +

Medicare levy surcharge 0 1% 1.25% 1.5%

The Medicare levy surcharge (MLS) is levied on Australian taxpayers who do not have an appropriate level of private hospital insurance and who earn above a certain income.

The family income threshold is increased by $1,500 for each Medicare levy surcharge dependent child after the first child.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

157

Low income tax offset 2017–18

Income threshold Calculation of offset

0–$37,000 $445

$37,001–$66,667 $445 [(TI – 37,000) x 1.5%]

Over $66,667 NIL


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

158

Private health insurance rebate 2017–18

PHIR Income thresholds

Status Base tier Tier 1 Tier 2 Tier 3

Single $90,000 $105,000 140,000 $140,001 +

Family $180,000 $210,000 $280,00 $280,001 +

Additional child increment (two or more children): $1,500.

Rebate for premiums paid from 1 July 2017 to 31 March 2018 (period 1).

Age Benefit code

Base Tier Tier 1 Tier 2 Tier 3

Under 65 30 25.934% 17.289% 8.644% 0%

65–69 35 30.256% 21.612% 12.966% 0%

70 or over 40 34.579% 25.934% 17.289% 0%

Rebate for premiums paid from 1 April 2018 to 30 June 2018 (period 2)

Age Benefit code

Base tier Tier 1 Tier 2 Tier 3

Under 65 31 25.415% 16.943% 8.471% 0%

65–69 36 29.651% 21.180% 12.707% 0%

70 or over 41 33.887% 25.415% 16.943% 0%

The income thresholds that determine tiers for the Medicare levy surcharge and the private

health insurance rebate will be paused at the 2015–16 rates until 2020–21. Therefore,

thresholds remain unchanged for the 2017–18 years.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

159

Dependency offsets 2017–18

Tax offset Rebate Maximum ATI

Invalid and invalid carer $2,666 Dependent: $10,946

Family: $100,000

Relevant rebate amounts for zone and overseas forces rebates – Notional offsets

Sole parent $1,607 Dependent: 1,786

Students under 25 or first child

younger than 21

$376 Dependent: 1,786

Other children under 21 $282 Dependent: 1,410

Zone and overseas forces rebate 2017–18

Zone Rebate amount

Special zone A $1,173 + 50% of the relevant rebate amount

Ordinary zone A $338 + 50% of the relevant rebate amount

Special zone B $1,173 + 50% of the relevant rebate amount

Ordinary zone B $57 + 20% of the relevant rebate amount

Overseas forces $338 + 50% of the relevant rebate amount

To qualify for the tax offset, the taxpayers usual place of residence must have been in a remote area (not necessarily continuously) for: 183 days or more during 2017–18, or 183 days or more during the period 1 July 2016 to 30 June 2018 (including at least one

day in 2017–18) and you did not claim a zone tax offset in your 2017 tax return. Offset is no longer available to fly-in-fly-out and drive-in-drive-out taxpayers to zones A

and/or B.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

160

Seniors and pensioners tax offset (SAPTO)

Code Details Maximum offset

Lower threshold

Upper threshold

Combined taxable income

A Single, widowed,

separated

$2,230 $32,279 $50,119 N/A

B Married, living apart

due to illness – both

eligible

$2,040 $31,279 each $47,599 each $95,198

C Married, living apart

due to illness – spouse

not eligible

$2,040 $31,279 each $47,599 each $95,198

D Married, living together

– both eligible

$1,602 $28,974 each $41,790 each $83,580

E Married, living together

– spouse not eligible

$1,602 $28,974 each $41,790 each $83,580

Each person is assessed on half their combined rebate income, and unused offsets are transferable.

Offset value is reduced by 12.5 cents in the dollar of rebate income.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

161

SAPTO pension age test tables

For a person born… Required pension age at 30 Jun

Before 1 July 1952 65

1 July 1952 –31 December 1953 65 years and 6 months

1 January 1954–30 June 1955 66 years

1 July 1955–31 December 1956 66 years and 6 months

After 31 December 1956 67 years

The taxpayer is eligible if they reach pension age at 30 June. Eligibility for an Australian government age pension from Centrelink requires an age of 65

years or older on 30 June, or subject to Veterans Affairs requirements, aged 60. From 1 July 2017 the Centrelink pension age is being progressively increased to age 67.

Net medical expenses tax offset (NMETO) 2017–18

Income range Single Family Claim threshold Excess

Tier 1 $90,000 $180,000 $2,333 20%

Tier 2 $90,001 $180,001 $5,504 10%

∗ Additional child increment $1,500

Taxpayers can only claim the medical expenses rebate for medical expenses relating to disability aids, attendant care or aged care until the end of the 2018–19 income year.

From the 2019–20 year, the medical expenses rebate will be abolished.

Motor vehicle rates per business km 2017–18

Description Per km

If a car travelled 5,000 km or less during the year on

business (or the claim is limited to 5,000 km)

66 cents

The Depreciation cost limit for 2017–18 $57,581

https://www.humanservices.gov.au/individuals/enablers/age-rules-age-pension


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

162

Private company loans 2017–18

Division 7A loan interest is 5.30% until 30 June 2018.

Research and development (R&D tax offset) 2017–18

Eligible entity type Rate

Eligible entities not controlled by tax exempt entity

with aggregated turnover > $20 million

43.5% (refundable)

Eligible entities controlled by a tax-exempt entity

where aggregated turnover is < $20 million

38.5% (non-refundable)

Income test thresholds 2017–18

Description Income rest Income threshold

Employee share schemes Adjusted income $180,000

Business Losses Adjusted income $250,000


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

163

HELP, TSL, SSL or ABSTUDYSSL and SFSS thresholds

Income threshold Tax Rate%

0–$55,873 0%

$55,874–$62,238 4%

$62,239–$68,602 4.5%

$68,603–$72,207 5%

$72,208–$77,618 5.5%

$77,619–$84,062 6%

$84,063–$88,486 6.5%

$88,487–$97,377 7%

$97,378–$103,765 7.5%

$103,766 + 8%

Where a taxpayer has both a HELP and a TSL debt the HELP debt will be repaid first.

Student financial supplement loan repayments thresholds

Income threshold Tax rate %

0–$55,873 0%

$55,873–$68,602 2%

$68,602–$97,377 3%

$97,378 + 4%


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

164

Employment termination payments 2017–18

ETP and superannuation lump sums – preservation age

For a person born… Preservation age

Before 1 July 1960 55

1 July 1960–30 June 1961 56

1 July 1961–30 June 1962 57

1 July 1962–30 June 1963 58

1 July 1963–30 June 1964 59

After 30 June 1964 60

ETP caps (indexed annually)

Type of cap 2017–18 2018–19

Employment termination payment $200,000 $205,000

Whole of income (not indexed) $180,000 $180,000

Death benefit ETP. The cap is reduced for any death

benefit termination payment previously received as a

result of the same termination, whether in an earlier

income year or the year of receipt.

$200,000 $205,000


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

165

Genuine redundancy and early retirement scheme payment limits

Income year Base limit For each complete year of service

2016–17 $9,936 $4,969

2017–18 $10,155 $5,078

2018–19 $10,399 $5,200

Superannuation lump sum caps (indexed annually)

Type of cap 2017–18 2018–19

Superannuation lump sum (lifetime cap) $200,000 $205,000

Superannuation untaxed plan cap $1.445 million $1.480 million

Transfer balance cap and defined benefit income cap

Income year General transfer balance cap amount Define benefit income cap

2017–18 $1.6 million $100,000

2018–19 $1.6 million $100,000


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

166

Superannuation contributions caps – concessional

Income Year All ages

2017–18 $25,000

2018–19 $25,000

Any concessional contributions more than the cap also count towards the person’s non-concessional contributions cap.

For 2017–18 and 2018–19, a single concessional cap of $25,000 applies for all ages.

Superannuation contributions caps – non-concessional

Details 2017–18 2018–19

Any age $100,000 $100,000

Bring forward cap for

individuals aged under 65

$300,000 $300,000

An individual can only make non-concessional contributions in the 2017–2018 year, if their total superannuation balance is less than $1.6 million.

Income exceeding $250,000 – extra tax on contributions

Division 293 tax is an additional tax on super contributions if a taxpayer combined income and

super contributions are more than the threshold.

From 1 July 2017 this threshold is $250,000.

Division 293 tax is 15% of taxable concessional contributions above the $250,000 threshold.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

167

Superannuation guarantee charge

Year SG rate

2014–15 to 2020–21 9.5%

2021–22 10.%

2022–23 10.5%

2023–24 11%

2024–25 11.5%

Later than 2025 12%

No SGC is payable where earnings are less than $450 per month, or employees are aged under 18 and work less than 30 hours a week.

Maximum contribution base is $52,760 earnings per quarter. Contribution payment is due by the 28th day after the end of each quarter.

Government super co-contribution rates

Taxable income 2017–18 2018–19

Lower threshold $36,813 $37,697

Upper threshold $51,813 $52,697

Maximum contribution $500 $500

Matching contribution $0.50 $0.50

The 10% income from working test has been removed for 2017–18 and later years. The offset decreases by 3.333 cents for each dollar of income over the lower threshold. Taxable income is the taxpayer’s assessable income plus reportable fringe benefits and

reportable employer superannuation contributions.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

168

Low-income superannuation contributions offset 2017–18

The low-income superannuation contributions offset (LISC) has been abolished and replaced

by the low-income superannuation tax offset (LISTO) from 1 July 2017.

Low-income superannuation tax offset 2017–18

Thresholds Amount

Adjusted taxable income threshold $37,000

Maximum contribution payable $500

Minimum contribution payable $10

Matching rate 15%

Super contributions on behalf of spouse offset 2017–18

Income threshold Tax offset amount

Lower threshold $37,000

Upper threshold $40,000

To be eligible for the rebate, a spouse cannot:

exceed their non-concessional contribution cap for the year have a total superannuation balance equal to or exceeding the general transfer

balance cap ($1.6 million for 2017–18) immediately before the start of the financial year in which the contribution was made.

The tax offset is calculated as 18% of the lower of:

$3,000 minus the amount over $37,000 earned by the spouse a tax offset of $540, being 18% of $3,000.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

169

Supervisory levy – self-managed super funds

Type of SMSF Label L amount

Label M amount

Label N amount

Net amount label L-M+N

Existing SMSF (not wound up

during 2017–18) $259 Blank Blank $259

Newly registered in 2017–18

(not wound up in 2017–18) $259 Blank $259 $518

Existing SMSF that is wound up

in 2017–18 $259 $259 Blank

Blank or

zero

Improvements to pre-CGT assets

Income year Threshold

2018 $147,582

2017 $145,401

2016 $143,392

2015 $140,443

2014 $136,884

2013 $134,200


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

170

General interest charge rates

Period Interest rate

July – September 2016 9.01%

October – December 2016 8.76%

January – March 2017 8.76%

April – June 2017 8.78%


October – December 2017 8.70%

January – March 2018 8.72%

April – June 2018 8.77%


Fringe benefits tax

Rate Y/E 31 March 2018 Y/E 31 March 2019

FBT 47% 47%

Gross-up rate – Type 1 benefits 2.0802 2.0802

Gross-up rate – Type 2 benefits 1.8868 1.8868

Where the previous year’s FBT liability is below $3,000, a single payment is due on 21 May 2018.


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

171

Company tax rates 2017–18

Companies generally including corporate limited partnerships, strata title bodies corporate,

trustees of corporate unit trusts and public trading trusts.

To be eligible as a base rate entity and taxed at 27.5% of taxable income, companies need to

have an aggregated turnover less than $25 million and be carrying on a business.

Non-profit companies


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

172

Retirement savings accounts (RSA)


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

173

Life assurance companies


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

174

Pooled development funds


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

175

Credit unions


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

176

Trustee tax rates 2017–18

Beneficiary assessed under section 98(1) or (2)

Resident beneficiary

Share of net income Tax on taxable income % on excess (marginal rate)

$18,200 Nil 19%

$37,000 $3,572 32.5%

$87,000 19,822 37%

$180,000 $54,232 45%

Non-resident beneficiary


Nil Nil 32.5%

$87,000 $28,275 37%

$180,000 $62,685 45%

Individual beneficiaries assessed under section 98(3) and 98(4)


Nil Nil 32.5%

$87,000 $28,275 37%

$180,000 $62,685 47%*


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

177

Company trustee beneficiaries assessed under section 98(3) and 98(4)

Flat tax rate

30%

Deceased estate less than 3 years from date of death (section 99)

Resident beneficiary


$18,200 Nil 19%

$37,000 $3,572 32.5%

$87,000 19,822 37%

$180,000 $54,232 47%*

Non-resident beneficiary


Nil Nil 32.5%

$87,000 $28,275 37%

$180,000 $62,685 47%*


…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………

178

Deceased estate greater than 3 Years from date of death – resident beneficiary

Share of net income Tax payable $ on excess (marginal rate)

$416 Nil 50%

$594 $89 19%

$37,000 $7,030 32.5%

$87,000 $23,280 37%

$180,000 $58,005 47%*

∗ For taxable incomes exceeding $180,000, the 2% TBRL applies to the part of taxable income exceeding $180,000. Non-refundable tax offsets cannot be used to offset the TBRL, but foreign income tax offsets can.

Deceased estate greater than 3 years from date of death – resident beneficiary


Nil Nil 32.5%

$87,000 $28,275 37%

$180,000 $62,685 47%*

∗ For taxable incomes exceeding $180,000, the 2% TBRL applies to the part of taxable income exceeding $180,000. Non-refundable tax offsets cannot be used to offset the TBRL, but foreign income tax offsets can.

No beneficiary presently entitled (section 99A)

Flat tax rate

47%

it’s more than a workbook. · tax incentives for early stage innovation companies tax incentives...

Documents