Lodgement Rates & Thresholds | 2018-19 Issue

To save you having to laboriously search for the right tax rate or relevant threshold, the essential information is right here in one place.

This guide includes tax rates, offset limits
and benchmarks, rebate levels, allowances, and essential super as well as FBT rates and thresholds (including current gross-up factors) and student loan repayment rates.

Immediate write off for assets that cost less than $20,000 extended for 12 months

In the 2017-18 Budget, the Government announced that they were extending the immediate write off for assets that cost less than $20,000 for an additional 12 months, until 30 June 2019, for small businesses (i.e. aggregated turnover threshold of $10 million). This change is not yet law.

 

  • Immediate deductions for most depreciating assets that cost less than $20,000 that are acquired and installed ready for use, up to and including, 30 June 2019. These accelerated depreciation rules apply to both new and second hand assets. Excluded assets are horticultural plants including grapevines, in-house software allocated to a software development pool and capital works.

 

  • The depreciating assets acquired and installed ready for use, up to and including, 30 June 2019 for $20,000 or more must be pooled and depreciated at 15% in the first year and 30% each year thereafter.

 

  • Write off the balance of your small business pool at the end of a financial year if the balance, before applying the depreciation deduction, is less than $20,000.

 

The current $2 million turnover threshold will be retained for access to the small business capital gains tax concessions.

 

In addition to the extension of the immediate write off, primary producers are eligible for the following concessions:

 

  • Primary producers can claim immediate deductions for capital expenditure on water facilities including dams, tanks, bores, irrigation channels, pumps, water towers and windmills; and fencing assets.

 

  • Primary producers can also claim fodder storage assets such as silos and tanks used to store grain and other animal feed assets over 3 income years.

FARM MANAGEMENT DEPOSITS & OFFSET ACCOUNTS

Farm Management Deposits (FMD) are a useful tax smoothing tool for Primary producers. They allow an individual who earns primary production income to deposit funds into a FMD in a good year and get a tax deduction equal to the greater of the deposit or their primary production income for that year if held for at least twelve months. When the money is withdrawn from the FMD it is assessable income to the tax payer. FMDs earn interest income assessable to the tax payer each year.

From July 2016 the Australian Taxation Office (ATO) have allowed for FMDs to offset loans which have been used to invest in primary production assets.

There a few restrictions to using the offset, being:

  1. The FMD & Business loan have to be held by the same financial institution
  2. The provision is only available to sole traders and individual partners in partnerships
  3. Loans have to be 100% related to primary production business (not a mixed loan)

For example; a farmer has a $100,000 in a FMD and a $500,000 primary production business loan. The $100,000 could be used to offset the loan so that interest is only charged on $400,000.

Currently there are only a few banks that allow this feature being; Rural Bank, Rabobank, Elders, NAB & CBA.