Website I Contact us I Send to a friend HENRY TAX REVIEW
After all the hype and media fanfare, what do you need to know about the Henry
Tax Review?The Henry review was billed as the most significant piece of tax reform in Australia
since the introduction of GST. The report included 138 recommendations with
consequences for all Australia. At this stage the government has adopted only a few
of the recommendations, rejected some completely and made no comment on
many others.Lets not forget that budget night is next Tuesday 11 of May and that 2010 is of course
a federal election year. Further changes to the tax system are just around the corner
and we can expect a number of further announcements throughout this calendar
year.The key highlights that you need to know are detailed below:
1. Reduction in company tax rate to 28%: 'Small businesses' will benefit from this
reduction for the first year in 2012/13 while for other companies it will be phased in at
29% for 2013/14 and 28% from 2014/15. click here.2. Small businesses immediate write-off of assets < $5,000: Assets valued at under
$5,000 can be written off in the year of purchase, (currently $1,000) and all other
assets (except buildings) will be written off in a single depreciation pool at a rate of
30% (this will apply from 1 July 2012). click here.3. 40% Resource Super Profits Tax (RSPT): Resource projects will be taxed at a rate of
40% on their profits rather than on production. Taxpayers will be eligible for a credit
for royalties paid to State and Territory Governments commencing on 1 July 2012. Any
businesses in the resource industry will need to calculate what this means to their
bottom line, return on investment and to shareholders. click here.4. Refundable tax offset (the Resource Exploration Rebate): The resource exploration
rebate will be made available to companies at the 30% corporate tax rate for
exploration expenditure incurred on or after 1 July 2011.5. Superannuation Guarantee rate increased to 12%: The guaranteed rate of
superannuation will increase from 9% to 12% through a phase in period from 1 July
2014 to 1 July 2020. Although this is not technically called a tax, this will undoubtedly
represent a material increase in the costs of employing staff. click here.6. Superannuation Guarantee age limit increased to 75: The age limit will be raised
from 70 to 75 commencing on 1 July 2013. click here.7. Continuation of concessional (deductible) super contributions limits in limited
circumstances: For those aged over 50, the concessional (deductible) super cap is
to continue beyond 30 June 2012 where an individual’s superannuation balance is
less then $500,000. click here.8. Government superannuation contributions for low income earners: From 1 July 2012
the government will provide low-income earners (earning less then $37,000) with a
super contribution by the government of up to $500.9. Proposals to simplify individual tax returns: For some simpler taxpayers, proposals
are expected to be announced later in the year to simplify the preparation of their
tax returns. This may include pre-filling tax return information and doing away with
the lodgment of tax returns for taxpayers with simple affairs.10. New State Infrastructure Fund: A new fund is to be set up to assist the states and
territories to fund major infrastructure projects. The fund will make contributions to
projects from 1 July 2012 as a result of revenue raised from the new resource profits
tax and will focus on the infrastructure needs of resource rich states.What is off the agenda?
Given so few of the recommendations have been accepted by the government, it is
just as important to understand the items that now appear to be off the reform
agenda.• Negative gearing is to remain untouched
• Dividend imputation will remain
• Capital Gains tax discounts to remain
• Confirmation that super payments will remain tax free for those aged over 60
• No changes are proposed to payroll tax
• No changes to the GST system
• Personal income tax rates will remain the same
• No changes to stamp dutyFor other recommendations rejected by the government click here.
We will keep you informed of any further tax reform developments as they develop.
In the meantime, if you have any questions or concerns about how these proposals
will impact your specific circumstances, please phone your usual contact to discuss.
Bean Thinking About Something Else?
Past Newsletters
Bean Thinking... Tips for businesses affected by the floods Bean Thinking... Budget 2010/11 Bean Thinking... Henry Review Bean Thinking... Sustainable Competitive Advantage Bean Thinking... 7 Deadly Wastes Bean Thinking... What-ifs Bean Thinking Tax... ATO Crackdown on Tax Debts! Bean Thinking Tax... R & D Tax Concessions Bean Thinking Tax... Recovery of Land Tax Bean Thinking Tax... Last Minute Tax Planning Tips Bean Thinking Super... Avoid Excess Super Contributions Bean Thinking Real Estate... Changes to Comission Structures Bean Thinking Real Estate... Benchmarks! Bean Thinking Real Estate... Purple Cows
Past Presentations
Bean Thinking Real Estate... Good, Bad & Ugly: Real Estate Business Bean Thinking Super... Super + Borrowing = ? Bean Thinking Super... Borrowing inside Super "How does it work?" Bean Thinking... Goals & Strategies for 2010/11 Bean Thinking... Tax Time for Unit Owners
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