Leased cars, self-education expenses and throwing large sums at superannuation are back again as attractive tax deductions and salary packaging options.
A tax rules Spring clean by the new federal government has restored key tax benefits in Australia.
The changes were announced by Treasurer Joe Hockey as he dealt with a backlog of 92 tax and superannuation measures announced but not legislated.
“This backlog has created significant operational uncertainty for businesses and consumers,” Hockey says.
Among the 92 measures, here’s three which are being binned:
Self-Education Expenses Cap: Labor planned to put a $2,000 cap on the amount claimed as a tax deduction. The rationale was that this would stop rorts including claims for first class travel to overseas conferences. However, Hockey says: “We have been advised that there is no credible evidence of substantial abuse of this deduction.” The Coalition government says expenses will continue to be tax deductible according to the normal rules and no cap.
Fringe Benefits Tax: Labor was to change tax benefits to those who leased a car through salary packing. The Coalition Government confirms it will not proceed with this measure. Those with leased cars, or planning to do so, will continue to be able to use the statutory method to calculate mileage. Hockey says Labor’s plans would have made it harder for people to have a company or salary sacrificed vehicle.
Tax on Superannuation Pensions: The Coalition Government will not proceed with Labor’s announcement which would have taxed people’s superannuation pension earnings above $100,000 in the draw-down phase.
The full tax spring clean details can be found here
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