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The key changes at a glance:
- Company tax rate from 36 per cent to 34 per cent for the 2000-01 income
tax year and to 30 per cent thereafter. Funded by moving to effective life
depreciation with the removal of balancing charge rollover relief.
- Attracting the world to save and invest in Australia :
- For individuals, only 50 per cent of capital gains being taxed, with
the result that the highest rate of tax for individuals is 24.25%.
- For Superannuation funds, only two thirds of capital gains being
taxed, a concessional tax rate of 10%.
- Freezing of indexation and the removal of averaging provisions (now
very simple).
- The existing 50 per cent capital gains tax goodwill exemption now
gone. Replaced with a 50% general capital gains tax exemption for all
"active assets" (bigger threshold). Put this with the general
50% exclusion and small business is only liable to tax on a maximum of
25% capital gains.
- Your concession is helped by introducing a full exemption from CGT on
the disposal of a business asset held for 15 years and you are 55 years
of age and you intend to retire.
- Reducing the compliance burden for 95 per cent of businesses and about 99
per cent of primary producers (that is, businesses with an annual turnover
of less than $1 million) by the introduction of a Simplified Tax System.
- Good news for Trusts: Taxation of trusts like companies, but with the
removal of the inter-corporate dividend rebate rather than the introduction
of a deferred company tax.
The Government didn't like Ralph's view on fringe benefits.
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