Cents per kilometre rate change
From 1 July 2023, the cents per kilometre rate is 85c for work-related car expenses. If your client is using the cents per kilometre method use this rate in income year 2024.
A new guideline is available to help clients to work out the cost of electricity when charging an electric vehicle (EV) from home. Clients can use the EV home charging rate of 4.2c per kilometre.
For more information, see PCG 2024/2 Electric vehicle home charging rate.
Medicare levy surcharge thresholds
From 1 July 2023 the Medicare Levy Surcharge thresholds have increased.
|
Threshold |
Base tier |
Tier 1 |
Tier 2 |
Tier 3 |
|---|---|---|---|---|
|
Single threshold |
$93,000 or less |
$93,001 – $108,000 |
$108,001 – $144,000 |
$144,001 or more |
|
Family threshold |
$186,000 or less |
$186,001 – $216,000 |
$216,001 – $288,000 |
$288,001 or more |
|
Medicare levy surcharge |
0% |
1% |
1.25% |
1.5% |
The family income threshold is increased by $1,500 for each MLS dependent child after the first child.
Trust income schedule
From the 2024 income year, if your clients received one or more distributions from trusts, they need to report the distributions from a trust that you report as:
- An individual, lodging by paper, in your individual supplementary tax return at
- question 13 Partnerships and trusts
- question 18 Capital gains
- question 19 Foreign entities
- question 20 Foreign source income and foreign assets or property.
- An individual, lodging online using myTax – see myTax instructions, Managed fund or trust distributions. The trust income schedule is integrated within myTax.
A tax agent, lodging for an individual using lodgment software – the trust income schedule will be integrated with the software (see income details schedule). The reporting of managed fund income for individuals has not changed. For information to help your clients complete the trust income schedule and who must complete the schedule, see Trust income schedule and instructions 2024.
For more information, see Modernising trust administration systems.
Effective life determination for depreciating assets
We're updating how we publish effective life determinations.
Use the effective life of a depreciating asset to work out its decline in value. Your clients can either make their own estimate of its effective life or use the Commissioner's effective life determinations. For assistance with both, see Effective life of an asset.
Self-education deductions
From the 2024 income year, your clients claim all eligible deductions for work-related self-education expenses at question D4 Work-related self-education expenses.
In prior income years clients would claim formal education courses provided by professional associations, seminars, education workshops or conferences at question D5 Other work-related expenses.
This doesn’t change the types of expenses or deduction your clients can claim, only the question where they claim them.
This change is limited to expenses your clients claim at question D4 and D5.
You continue to claim motor vehicle and travel expenses at questions D1 and D2.
Individuals in business
Clients who complete income questions 14, 15 or 16 or have a net loss from business activity carried on in partnership at question 13 in the supplementary tax return should be aware of the following measures.
Small business energy incentive
The Treasury Laws Amendment (Support for Small Business Charities, and other Measures) Act 2024External Link provides businesses with an aggregated annual turnover of less than $50 million with access to a bonus deduction equal to 20% of the cost of eligible assets and improvements to existing assets that support more efficient energy use.
This is a temporary measure to support small businesses to improve their energy efficiency and save on energy bills. The bonus deduction applies to the cost of eligible assets and improvements up to a maximum amount of $100,000, with the maximum bonus deduction being $20,000.
If you're claiming the bonus deduction for the small business energy incentive, complete:
- P8 Business income and expenses – Expense reconciliation adjustments
- P12 Small business bonus deductions – label O Small business energy incentive.
For more information, see Small business energy incentive.
Small business – $20,000 Instant asset write-off
The Treasury Laws Amendment (Support for Small Business, Charities, and other Measures) Act 2024External Link provides a temporary increase to the instant asset write-off threshold to support small business entities (with an aggregated annual turnover of less than $10 million).
Eligible small business entities are able to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that were first used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024.
The $20,000 threshold applies on a per asset basis, so small business entities can instantly write off multiple assets. Small business entitiess are also able to immediately deduct an eligible amount included in the second element of a depreciating asset's cost.
The 5-year 'lock out' rule is suspended until 30 June 2024. This rule prevented small businesses from re-entering the simplified depreciation regime if they opted out.
If your clients are claiming a deduction under the instant asset write-off, they complete P8 Expenses – label M and P10 Small business entity simplified depreciation – label A.
For more information, see Small business support – $20,000 instant asset write-off.
Thin capitalisation
The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024External Link amends thin capitalisation rules for income years commencing on or after 1 July 2023.
Under the new thin capitalisation rules:
- The newly classified 'general class investors' will be subject to one of 3 new tests
- Fixed ratio test
- Group ratio test
- Third party debt test.
- Financial entities will continue to be subject to the existing safe harbour test and worldwide gearing test or may choose the new third party debt test.
- Authorised deposit-taking institutions (ADIs) will continue to be subject to the previous thin capitalisation rules.
- The arm’s length debt test has been removed for all taxpayers.
These rules are supported by the new integrity rules – debt deduction creation rules, which will apply to assessments for income years starting on or after 1 July 2024.
For more information, see Thin capitalisation.
Changes to the Business and professional items schedule 2024
In the Business and Professional Items schedule 2024, the following labels have been removed for the income year 2024:
- P11 Capital allowances – labels
- C Are you making a choice to opt out of TFE for some or all of your eligible assets?
- D Number of assets you are opting out for
- E Value of assets you are opting out for
- F Temporary full expensing deductions
- G Number of assets you are claiming for.
For more information on key changes and new measures affecting your clients, see What's new for individuals.