Targeted personal income tax relief
From 1 July 2016, the marginal tax rate of 37% starts at $87,000, instead of $80,000.
Working holiday makers
These changes affect you if you were on a 417 or 462 working holiday visa and earned income at any time from 1 January 2017 to 30 June 2017.
The first $37,000 of your working holiday maker net income earned from 1 January 2017 to 30 June 2017 will be taxed at 15%. All other income will be taxed according to your residency status. Show your gross payment type H working holiday income at item 1 and working holiday maker net income at item A4.
Reportable fringe benefits changes
The government has changed how reportable fringe benefits are included in your adjusted taxable income for family assistance and youth income support payments. We provide information on reportable fringe benefits to the Department of Human Services, so we have changed how you show these benefits on your income tax return at item IT1 and Spouse details. This change does not affect your income tax liability for 2016–17.
Expanded access to small business concessions
From 1 July 2016, the small business entity aggregated turnover threshold for a range of small business concessions increased from $2 million to $10 million.
The $10 million aggregated turnover threshold applies to most of the small business concessions, except for:
- the small business income tax offset, which is available to businesses with aggregated turnover of less than $5 million from 1 July 2016 (available to individuals)
- capital gains tax (CGT) concessions for small business, where the aggregated turnover threshold of $2 million continues to apply.
The aggregated turnover threshold for the FBT concessions increases to $10 million from 1 April 2017.
Small business income tax offset
From 1 July 2016:
- the discount rate for the small business income tax offset increased to 8% (previously 5%) with a limit of $1,000 each year
- the offset applies to small businesses with aggregated turnover of less than $5 million (previously $2 million).
New Zealand special category visa (subclass 444) holders
If you are a New Zealand special category visa (subclass 444) holder who has been adversely affected by a disaster in Australia in 2014–15 and later years, you may be entitled to:
- a tax rebate for ex-gratia Income Support Allowance (ISA) you received, and
- an income tax exemption for ex-gratia Disaster Recovery Payments (DRP) you received.
Changes to foreign employment income exemptions
From 1 July 2016, if you are an Australian government agency employee (and not a member of a disciplined force) you do not qualify for an income tax exemption for the foreign employment income earned while delivering Australian official development assistance (ODA).
Farm management deposit reforms
From 1 July 2016, eligible primary producers can access their deposits early and without losing their concessional tax treatment in circumstances of severe drought. The maximum amount of deposits able to be held at any one time has increased to $800,000. For more information, see Farm management deposits scheme.
Capital gains withholding: Impacts on foreign and Australian residents
New rules apply to purchasers and vendors of certain taxable Australian property under contracts entered into from 1 July 2016. A 10% withholding will be applied to these transactions at settlement.
Australian resident vendors selling real property will need to obtain a clearance certificate from us prior to settlement, to ensure the purchaser does not withhold an amount from the sale proceeds. If you have had amounts withheld from you during the year you are entitled to claim a credit for those amounts paid to us by the purchaser.
Taxable Australian real property with a market value of less than $2 million is not subject to the new rules for the income year ended 30 June 2017. For more information, see Capital gains withholding: Impacts on foreign and Australian residents.
Capital gains tax changes for foreign investors
On 9 May 2017 the Government announced that Australia's foreign resident capital gains tax (CGT) regime will be extended to deny foreign and temporary tax residents access to the CGT main residence exemption. This change applies from the date of announcement.
Properties held prior to this date will be grandfathered until 30 June 2019. Legislation is being developed for this measure.
For more information see: Capital gains tax changes for foreign investors.
Early stage venture capital limited partnership tax incentives and concessions
From 1 July 2016, a limited partner of an early stage venture capital limited partnership (ESVCLP) may qualify for a non-refundable carry forward tax offset of up to 10% of their contribution to an ESVCLP. The ESVCLP must have become unconditionally registered on or after 7 December 2015.
You claim this tax offset at item T8. For more information, see ESVCLP tax incentives and concessions.
Tax incentives for early stage investors
From 1 July 2016, investors who acquire newly issued shares in a qualifying early stage innovation company may be eligible for a non-refundable carry forward tax offset equal to 20% of the amount paid for the shares (and capped at a maximum amount of $200,000 for each year for the investor and their affiliates combined). You claim this tax offset at item T9.
The investors must disregard any capital losses on these shares from a CGT event that takes place in 2016–17. See item 18.
For more information, see Tax incentives for early stage investors.
A list of new initiatives incorporated in this year's Individual tax return instructions.