Monthly Archives

November 2016

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Changes to Superannuation Law

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By James Nott, B.Com, CA, CTA

After considerable debate in the Community the amendments have now been passed by both houses of Parliament.
Key amendments, most of which apply from 1 July 2017 are as follows:

Concessional Contributions
These are contributions by an employer, a business or a personal contribution which are tax deductible.
Presently the maximum amount allowed to be contributed is $30,000 (individuals aged less than 50) and $35,000 (individuals aged 50 and over.
This will reduce to $25,000 for everyone regardless of age.
Note that the rule that required taxpayers to earn less than 10% of their income from employment will be removed.

Non-Concessional Contributions
These are contributions made by individuals which are not tax deductible. Such contributions are often made as a result of an inheritance or the sale of a major asset such as a property.
Presently the maximum amount allowed to be contributed is $180,000 per annum.
This will reduce to $100,000 per annum.
The bring forward rule which allows those under 65 years of age to contribute for three years in one year will reduce from $540,000 to $300,000.
Non-Concessional contributions cannot be made when a member’s superannuation balance reaches $1.6 million.

Superannuation pension cap of $1.6 million
This important change imposes a maximum amount that can be held in pension mode will be limited to $1.6 million. Any excess over this amount has to be withdrawn or transferred to another account in the Fund which will be treated as an accumulation balance ie income is subject to income tax at 15%.

Nott

Do You Employ Backpackers?

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By James Nott, B.Com, CA, CTA

This taxation measure (formal name Working Holiday Maker Reform) is presently before the Parliament.
It creates a new class of taxpayer. Presuming the measures are passed, as well as the Resident Individual Rates and Non-Resident Individual rates, from 1 January 2017 there will also be the “Working Holiday Rates”.

These working holidaymakers are generally employed in the agriculture and tourism sectors. The measures apply a 19 percent income tax rate on worker holiday maker income on amounts up to $37,000 with ordinary tax rates for taxable income exceeding this amount. Employers of working holiday makers will be required to specially register with the Taxation Office. If the employer is not registered as a working holiday employer, then tax at the non-resident rate has to be withheld (32.5 percent). Presumably backpackers are unlikely to work for an employer who has to withhold extra income tax.
Superannuation payments on behalf of employees will continue, but departure Superannuation payments will be taxed at a rate of 95 percent.

Note that the Australian Taxation Office has recently issued a bulletin that should the measures not pass into law, then the existing income tax rates (standard and non-resident) would continue to apply.
The Parliament sat last week, and is not sitting this week, then has a final two week period before the long summer break.
Watch this space for final outcomes!

Want to know more check this out –  http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/BackpackerTaxBill2016

siddc-visit

Tripping around the countryside with Duncan Ashby

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Duncan recently visited New Zealand’s ‘South Island Dairying Development Centre’ (SID-DC) to see how the acceleration of South Island dairying development has been driven by a ‘model farm’ approach that has gathered expertise, resources, and services to deliver education and extension to dairy farmers.

The model farm highlighted the methods for delivering improved performance and also for dealing with pressing environmental concerns such as farm run-off that threatens the water quality of South Island rivers.