With more leaks than the titanic, the latest budget didn't deliver too many surprises with most of the information and changes published prior to the budget. We have distilled down the budget to 5 key areas that will impact you building your wealth and if possible, any strategies that can be used.
1. A 2% levy on individual taxable income above $180,000 - The fine print states that it is not 2% on your entire income just the amount over $180,000. For someone on $200,000 this is $400. This also doesn't just apply to income it includes capital gains and some super benefits.
2. Option to withdraw excess contributions to super from 1st July 2013 - This is a fantastic change as it means if you inadvertently make excess contributions, instead of being taxed at the top marginal tax rate you can withdraw your funds. This makes it very important to monitor your contributions throughout the year and have a clear strategy to review before the end of the financial year.
3. Changes to Family Tax Benefit B - The primary income earners income limit will be reduced to $100,000 from $150,000. This means if the primary income earner earns more than $100,000 you will no longer be eligible to receive the Family Tax Benefit B.
4. Paid Parental leave to commence on the 1st July 2015 - This scheme will see mothers receive up to 26 weeks salary of $100,000 (maximum of $50,000).
5. For Innovative Business Owners - you will receive a 1.5% reduction in the company tax rate by 1 July 2015. There has been a raft of changes in the tax concession and grant space for innovative companies and those looking to take their goods and services overseas. A new 'Entrepreneurs Infrastructure Program' has been released instead with a significantly reduced budget. This is one area the budget delivered a few surprises with the abolition of Commercialisation Australia.
As with any change time will tell if it has the desired impact.
We have included links here to 2 good budget summaries.
The first is by our own association the Financial Planning Association: http://financialplanningassociation.cmail3.com/t/r-l-xtitdyk-tkuduutjlr-e/
and the other is by Challenger Financial Services:
http://click.email.challenger.com.au/?
As always we are very happy to hear your feedback
Happy reading
Gordon Hatch
Telephone – (02) 9411-4161
Email: gordon@taurusfinancial.com.au
