Labor's Proposed Tax and Super Changes

Labor's proposed tax and super changes for the expected May 2019 federal election are many.

Labor's Proposed Tax and Super Changes

The list is long. There are well over 30 proposed changes just around tax and super. In today's episode Gordon Mackenzie of UNSW will focus on three of these changes - franking credit refunds, negative gearing and CGT discounts.

To listen while you drive, walk or work, just access the episode through a podcast app on your mobile phone.

No Refund of Franking Credits

Under Labor shareholders would no longer be able to obtain a tax refund of any excess franking credit. This would take Australia's dividend imputation system back to its original version under Hawke and Keating, before Costello and Howard introduced cash refunds in 2000. Recipients of an Australian pension or allowance and any SMSF with at least one such member as of 28 March 2018 as well as charities and not-for profits institutions would be exempt from these changes.

No Negative Gearing of Passive Assets

Investors would only be able to offset investment losses with investment gains or a future capital gain. But there would no longer be an offset with PAYG income, unless the investment is newly constructed housing or grandfathered. CGT Discount Only 25%The CGT discount for individuals and trusts would reduce from 50% to 25% for assets held for more than a year. The 33.33% CGT discount for super funds would remain unchanged for now. Small business assets would also be exempt from this change.These are three of the changes we will cover in this episode. But there is a lot more. Here is a quick list.

SUPER

a) Reduce Non-Concessional Contribution Cap to $75,000

b) Reduce Div 293 Threshold to $200,000c) Eliminate Catch-up of Concessional Contributionsd) Revive Work Test for Personal Super Contributionse) Ban New LRBAsf) Increase SG to 12% Fasterg) Extend SG to Wages Less Than $450 Per Monthh) ATO to Develop Tax Haven Guidelines for SMSFs

TAX

a) Minimum 30% tax on districtionary trust distributionsb) Increase Top Marginal Tax Rate to 49%

c) Decrease SME Tax Rate to 25%d) Reduce Tax for Low Income Earnerse) Limit Deduction for Tax Agent Fees to $3,000f) Start Australian Investment Guarantee (AIG)

TAX ADMINISTRATION

a) Protect and Reward Whistleblowers up to $250,000b) Appoint a Second Commissioner of Taxationc) Appoint Community Representative to Board of Taxationd) Disclose Number and Size of Tax Settementse) Increase Penalties for Promotion of Tax Evasion Schemesf) Fund Free Tax Clinicsg) Establish a Central Registry of Companies and Trusts

INTERNATIONAL TAX

a) Compulsory Disclosure of Residency And Citizenshipb) Deny Tax Deduction for Travel to Tax Havensc) Tighten Thin Capitalisation Rulesd) Tighten MEC Group Rulese) Decrease Tax Transparency Threshold to $100mf) Disclose CbC Reports to Publicg) Disclose Tax Haven Exposure to Shareholdersh) Disclose Country of Tax Domicile in Government Tendersi) Disclose AUSTRACT Cash Flow Dataj) Increase Compliance FundingAll this is just our brief take on the issue, but please listen to the episode above. Gordon Mackenzie explains all this in a much better way than we ever could.

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A Fish Rots From The Head DownAge PensionAged LivingDisclaimer:Tax Talks does not provide financial or tax advice. This applies to these show notes as well as the actual podcast interview. All information on Tax Talks is provided for entertainment purposes only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.