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and accounting

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

Your partners for Business Service and Advisory, Taxation, Audit, Business Valuation, Forensic Accounting and Business Valuation Services.

Whatever your business, industry or family office, from local or international institutions we bring extensive expertise.

We're one team with a purpose and passion for what we do. Learn about our culture and career opportunities available to you.

Uncovering insights, trends and inspiration to help business grow in an ever-changing world.

We are always looking for ways to engage and give back to our community.

Telephone: +612 9283 1666
Email: admin@esvgroup.com

Level 13, 68 York Street,
Sydney NSW 2000

Why us

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

What we do

Your partners for Business Service and Advisory, Taxation, Audit, Business Valuation, Forensic Accounting and Business Valuation Services.

Who do we help

Whatever your business, industry or family office, from local or international institutions we bring extensive expertise.

Work with us

We're one team with a purpose and passion for what we do. Learn about our culture and career opportunities available to you.

What we think

Uncovering insights, trends and inspiration to help business grow in an ever-changing world.

Working to give back

We are always looking for ways to engage and give back to our community.

Contact us

Telephone: +612 9283 1666
Email: admin@esvgroup.com

Level 13, 68 York Street,
Sydney NSW 2000

2019 Budget Special: Personal Tax

29 October 2019

by David Prichard

The main aspect of the Federal Budget were the changes announced to personal income tax bandings and rates albeit that some of these are phased in over a long period. The instant changes are focused on the Energy Assistance payments and the doubling of the low to middle income tax offset (LMITO).

Tax Rate and Banding Changes

The Federal Budget has announced what is, in essence, a structural change to the personal tax rate bandings and will, if implemented, be applicable to over 90% of taxpayers with effect from the 2024 income tax year.

The initial step of the proposed changes impacts the 32.5% threshold, which, from 1 July 2022, will be increased to $45,000 (from $41,000).

The second step of the proposed changes eliminates the 32.5% tax rate such that the tax rate for income levels between $45,000 and $200,000 would be capped at 30% (excluding Medicare). The removal of the 32.5% rate is to occur with effect from 1 July 2024.

2019/20 TAX RATES

A summary of the Tax rates and thresholds for 2019-20 onwards is as follows:

 

Income Tax Rates & Thresholds

Rate

2018-19 to 2021-22

2022-23 and 2023-24

Rate

2024-25 onwards

0% $0 – $18,200 $0 – $18,200 0% $0 – $18,200
19% $18,201 – 37,000 $18,201 – 45,000 19% $18,201 – $45,000
32.5% $37,001 – 90,000 $45,001 – 120,000 30% $45,001 – $200,000
37% $90,001 – $180,000 $120,001 – $180,000 37% N/A
45% $180,001+ $180,001+ 45% $200,001+

 

The above table excludes the Medicare Levy of 2%.

Low to Middle Income Tax Offset and Low Income Tax Offset

The Federal Budget has proposed a doubling of the LMITO taking the maximum offset from $530 to $1,080 per year expiring in 2022.

The increase whilst clearly needed by low to middle income tax payers has the added impact of seeking to negate Labor’s appeal to taxpayers in the similar tax brackets.

The Low Income Tax Offset (LITO) will effectively merge with the LMITO in 2022 and as part of this process the budget includes an increase in the LITO to $700 from 1 July 2022.

Energy Assistance Payments

In classic pre-election style the Federal Government have announced that singles and couples will receive $75 and $125 respectively. The one-off Energy Assistance payment will not, however, be available for everyone with pensions, people on the Disability Support Pension, veterans, carers and single parents those to benefit.

Main Residence Exemption – Non-Residents

There was no renewed announcement in the Federal Budget to revive the previously announced changes to the main residence exemption. The changes impacted non-residents and appears to be yet another announced change that has not been enacted and will, in all likelihood be condemned to history.

The legislation was scheduled to take full effect from 1 July 2019, however, the legislation is stuck in the Senate with little chance of progression due to technical flaws, the upcoming election and the Government prioritising other matters.

Should you require further information to the above or have any questions about how this may impact your situation, please do not hesitate to contact your engagement partner on 02 9283 1666.