As 2022 winds down and the new Government winds up with their first budget, in this edition of Pulse we explore tax exemptions for electric cars, bring-forward super rule updates, new Corporate Collective Investment Vehicle, and changes in super downsizer contributions and personal tax rates. We also give you a FINAL reminder to get your Director ID Number before the 30 November deadline.
As always, if you have questions or need advice, call our team on (02) 9997 4647.
It’s electrifying! Fringe benefits tax and electric cars
If you’re like many Australians, you may be considering a switch to an electric vehicle (EV) next time you visit the dealership. Now the Federal Government is trying to accelerate this growing demand with a proposed law that would remove fringe benefits tax (FBT) for the personal use of electric cars operated by a business or under a novated lease.
In a tight jobs market, employers are offering a range of benefits to lure the best talent. With cars being one of the most popular fringe benefits, removing the tax on EVs could power their uptake nationwide. But before you get too revved up, the generous FBT exemption doesn’t apply to private buyers, and hasn’t been formally made into law just yet – if enacted, it will apply from the FBT year beginning 1 April 2022.
However, it’s still very promising news for EV loving employers and employees. We’d be happy to discuss the specific details and potential benefits for you and your business.
Under 75? You could be eligible for the bring-forward super arrangement
As you move closer to retirement, or if you come into some additional funds, we often recommend that clients put additional money into super as a tax-effective way to grow their nest egg.
There are limits on how much you can move into super each year, so a bring-forward arrangement is one way for eligible people to combine non-concessional contributions from future years and use them in a single year without paying extra tax.
While this is not a new option, from 1 July 2022 the access age has been increased to make it available to more people. Previously you needed to be under age 67 years to start a bring-forward arrangement, but now if you’re under 75 (at any point within a financial year) you may be eligible to contribute up to three times your limit in that financial year. If this applies to you, give us a call to discuss your situation.
Corporate Collective Investment Vehicle (CCIV) now operating
A new company structure called a corporate collective investment vehicle (CCIV) is now in place and open to registrations as of 1 July 2022. A CCIV is a company limited by shares and is a separate legal entity.
Offering an alternative to managed investment funds, the creation of this new structure aims to introduce a more globally recognisable investment structure to attract more offshore investment into Australian funds.
Whether you’re raising capital in the domestic market or thinking of attracting overseas investors, Financial Decisions would be pleased to discuss your options concerning this new structure.
Selling your home? You could benefit from the super downsizer contribution changes
From 1 July 2022, eligible people aged 60 years and over will be able to make downsizer contributions of up to $300,000 per person ($600,000 per couple) from the sale proceeds of their home into their super. For downsizer contributions made before 1 July 2022, eligible individuals must still be aged 65 years or older at the time of making their contribution.
And in even better news, during the 2022 Federal election the Government announced it would support a further reduction to the downsizer eligibility age to 55 years, but this is not yet law.
Further information is available on the ATO website or contact us to discuss your situation.
Personal tax rate changes from 1 July 2024
Although no new personal tax rate changes were announced in the latest Federal Budget, tax rate reductions are on their way.
From 1 July 2024 the 32.5% marginal tax rate will be reduced to 30% and the maximum threshold will be increased from $120,000 to $200,000. Therefore, the 30% tax rate will cover the tax bracket between $45,000 and $200,000, and the 37% tax bracket will be removed altogether.
From 1 July 2024 only three tax brackets are scheduled to be in operation – 19%, 30% and 45%.
FINAL reminder: Apply for your Director ID Number by 30 November
As you may recall from our previous newsletters, the Government now requires all directors of Australian companies to have a Director Identification Number by 30 November 2022.
The fastest way to apply is through the MyGovID app. Alternatively, you can call the Australian Business Registry Services to arrange a paper application. Under the regulations, only the director themselves can apply for the Director Identification Number.
Don’t get caught out, strong penalties apply. Click here to download the detailed letter we have prepared outlining the application process. Please feel free to contact us if you need any assistance with the application or understanding your director ID obligations.
We’re here to help
Financial Decisions is your one-stop, expert financial partner for generations to come. If you have any questions or need advice, please call us on (02) 9997 4647.
Contact: Financial Decisions PO Box 484 Mona Vale NSW 1660, T 02 9997 4647, F 02 9997 7407