2019 – A year of change
With a new year upon us, it seemed a good time to consider some of the changes we may see in 2019.
There will be a Federal Election
We know there will be a Federal election this year and at this stage, we expect it to be held in May.
The current Government hasn’t yet released much information around its’ proposed tax changes however, they have moved the Federal Budget announcement forward by about a month to Tuesday 4 April which is when we expect to see their proposed changes outlined.
The Labor Party however, has already announced some of their tax policies which includes the following:
- Removal of negative gearing for assets
- The removal of the refund of excess franking credits for most taxpayers (charities and NFPs will be exempt from the changes)
- Halving the current 50% CGT discount to 25%
- Applying a 30% tax rate to the income of trusts
Without any further details or legislation, it is impossible to know how these changes will be implemented and therefore what the initial and ongoing impact will be to individuals, trusts, superannuation funds and subsequently, the property market and share market.
If you would like to discuss the potential impact of these proposed changes, please contact your Holman Hodge adviser.
The Personal Property Security Act (PPSA) turns 7 years old
Why does this matter?
When the PPSA was first introduced in January seven years ago, the cheapest registration was for a period of seven years or less. If this was the option taken, it means the registration may soon expire. If you have registered any interests on the Personal Property Securities Register (PPSR) under the PPSA you should review your registration.
This is important for a number of reasons:
- If the registration lapses you will no longer have security over the item, and
- A lapsed registration cannot be renewed – a new security interest needs to be registered but it’s important to note that the new security interest might not have the same priority as the original registration
If you renew the registration before it lapses, the original date of registration will stand and original priority will continue.
Please let us know if you would like further information on how to review your registered interests.
Final report- Financial Services Royal Commission
As most people would be aware, the Financial Services Royal Commission (commonly called the “Banking Royal Commission”) was held last year. The final report is due to be provided to the Governor-General on 1 February 2019. Without wanting to guess the outcomes of the Royal Commission, we expect that the level of compliance will increase for the finance industry, which may result in some wholesale changes to the banking, finance and superannuation industries.
These changes may have flow on effects for business, investment and personal borrowings – we have already seen the tightening of rules around assessing credit card applications from 1 January.
We await the outcomes and recommendations of the Royal Commission and will provide further information at that time.
The company tax rate changes will be bedded down
The company tax rate for most companies who have aggregated turnover of less than $50M (for the 2018-19 financial year) will be 27.5%. This tax rate will drop to 25% by the 2021-22 financial year.
These changes, coupled with other announced and/or enacted changes which impact small businesses, such as the small business capital gains tax concessions and Division 7A, may also mean that the way businesses and investments are structured should be reconsidered.
The Division 7A rules may change
In 2018, the Government released a consultation paper outlining some fairly significant proposed changes to Division 7A (refer to client update). Submissions were made by a number of professional bodies and we are yet to see anything further from the Government. The proposed start date of these changes was intended to be 1 July 2019.
myGov – where individuals link their myGov account to the ATO, please note that the majority of your ATO mail will only be sent to you via your myGov inbox. As your Tax Agent, we will no longer receive copies or notification of correspondence from the ATO on your behalf. Click here for more detail
SA Payroll Tax changes – from 1 January 2019, businesses who have total wages less than $1.5 million will no longer have to pay Payroll Tax in SA. Click here for further details
ATO scam phone calls – as previously advised, please be aware of scam phone calls from the ATO. Unfortunately we are still seeing an increase in these calls. If you receive a call and they say they are from the ATO and you owe them money, please DO NOT pay anything over the phone and contact us straight away.
If you would like to discuss any of the above in more detail, please speak with your Holman Hodge contact.