The Government will align the income tax treatment of off-market share buy-backs undertaken by listed public companies with the treatment of on-market share buy-backs. This measure is aimed at improving the tax integrity of such transactions to ensure they are not used to obtain a tax advantage for entities involved.
This will result in no amount of the purchase price received from these off-market share buy-backs being treated as a dividend.
Digital currencies (such as Bitcoin) will continue to be excluded from the Australian income tax treatment of foreign currency. The current tax treatment of digital currencies is still in place, including the capital gains tax treatment where they are held as an investment. This is backdated to income years that include 1 July 2021.
From 1 July 2022, hydrogen fuel cell and plug-in hybrid electric cars will be exempt from fringe benefits tax and import tariffs if they have a first retail price below the luxury car tax (LCT) threshold for fuel-efficient cars. The LCT threshold for the 2023 financial year is $84,916.
The car must not have been held or used before 1 July 2022.
Depreciation of Intangible Assets
The Government will not proceed with the measure to allow taxpayers to self-assess the effective life of intangible depreciation asset, as announced in the previous 2021-22 Budget. Reversing this decision will mean the effective lives of intangible depreciation assets will continue to be set by statute.
The Government will amend the tax law to specifically list Australians for Indigenous Constitutional Recognition as a deductible gift recipient (DGR) for donations made from 1 July 2022 to 30 June 2025. The Government will also extend the listing of Australian Women Donors Network as a DGR for 5 years, for gifts made from 9 March 2023 to 8 March 2028.
Taxpayers may claim an income tax deduction for donations of $2 or more to DGRs.
Heavy Vehicle Road User Charge
The Heavy Vehicle Road User Charge rate has been increased from 26.4 cents per litre to 27.2 cents per litre to 27.2 cents per litre of diesel fuel, effective from 29 September 2022.
Child Care Subsidy (CCS)
From 1 July 2023, CCS will increase from 85% to 90% for families earning less than $80,000. Subsidy rates will taper down 1% for each additional $5,000 in income until it reaches zero per cent for families earning $530,000.
The current higher CCS rates for families with multiple children aged 5 or under in childcare will be maintained, with higher CCS rates to cease 26 weeks after the older child’s las session of care, or when the child turns 6 years old. Further information regarding this can be found in the below link:
Paid Parental Leave Scheme
The paid parental leave scheme will become more flexible for families so that either parent is able to claim the payment and both birth and non-birth parents are allowed to receive the payment if they meet the eligibility criteria, to take effect from 1 July 2023.
From 1 July 2024, the Government will start expanding the scheme by two additional weeks a year until it reaches a full 26 weeks from 1 July 2026. Both parents will be able to share the leave entitlement to encourage both parents to share the caring responsibilities more equally. Sole parents will be able to access the full 26 weeks.
Further information regarding this scheme can be found in the below link:
The minimum eligibility age to make a downsizer contribution will be reduced from 60 to 55 years of age. The downsizer contribution allows people to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home. This does not count towards non-concessional contribution caps
Those receiving an Age Pension or DVA Pension will receive a temporary income bank top up of $4,000 to encourage older Australians into the workforce. This will increase the amount pensioners can earn in 2022-23 from $7,800 to $11,800, before their pension is reduced.
Commonwealth Seniors Health Card
For those over pension age, the income threshold for the Commonwealth Seniors Health Card will be increased from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined income) for couples.
Regional First Home Buyers
The Government will establish the Regional First Home Buyers Guarantee to support eligible citizens and permanent residents who have lived in a regional location for more than 12 months to purchase their first home in that location with a minimum 5% deposit, with 10,000 places per year to 30 June 2026.
Defence Home Ownership Assistance Scheme
The Government will provide $46.2 million over 4 years from 2022-23 to expand access to the Defence Home Ownership Assistance Scheme to support Australian Defence Force (AD) personnel and veterans to purchase their own home. The expansion will reduce the minimum service periods for subsidised mortgage interest payments and remove the current post separation timeframe to allow veterans to access the scheme any time after they leave the ADF.
The Government will provide 480,000 fee-free Technical and Further Education (TAFE) and vocational education places in industries and regions with skills shortages. These will be provided over 5 years.
If you have any questions regarding the above announcements, the team at Rawson Verco Need will be pleased to assist you.