Personal Tax

December 12, 2013

As part of our continuous service to our clients and other taxpayers interested in what Gotsis Accounting has to offer we have listed below a number of areas that relate to personal tax and other grants available to individuals.

First Home Savers Account (FHSA)
If you are an Australian aged 18 years or older, the Australian government provides you with assistance to help you save for your first home. You will receive a contribution equal to 17% of your personal contributions for the financial year, up to a maximum of $935 for the 2011-12 year.  However it was announced in the 2014-2015 budget that the First Home Saver Account will cease for all new accounts before 13/5/2014 and eligibility for government contribution will cease from 1/7/2014.

First Home Owner Grant (New Homes)
Introduced on 1 July 2000, the First Home Owner Grant was brought in to offset the effect of GST when purchasing your home. This grant entitles first home owners to a one-off grant of up to $7,000 if all of the eligibility criteria is satisfied.  However, the $7,000 grant no longer applies if the transaction is dated on or after 1 October 2012.  Instead, the NSW government has replaced the $7,000 First Home Owner Grant with a $15,000 First Home Owner Grant (New Homes) for transactions entered into on or after 1 October 2012.  The $15,000 grant will only be applicable to first home owners who purchase or build a new home.  The grant does not apply to the purchase of an established home, vacant land, business premises or a holiday house.  To be eligible for the $15,000 grant, the total value of the property must not exceed $650,000 between 1/10/2012 and 30/6/2014 and after 1/7/2014 the total value of the property must not exceed $750,000.  The grant will reduce to $10,000 on 1 January 2016.

Individual Tax Rates for Australian Residents

The 2011/12 and 2012/13 income tax rates for resident individuals (excluding Medicare Levy) is listed below. The major change between the 2011/12 and the 2012/13 rates is the uplift of the tax free threshold from $6,000 to $18,200.

2011/12 Tax Rates 2012/13 & 2013/14 Tax Rates
 Taxable Income  Marginal Tax Rates  Taxable Income  Marginal  Tax Rates
$0-$6,000 NIL $0-$18,200 NIL
$6,001-$37,000 15% $18,201-$37,000 19%
$37,001-$80,000 30% $37,001-$80,000 32.5%
$80,001-$180,000 37% $80,001-$180,000 37%
$180,001+ 45% $180,001+ 45%

Foreign Employment Income
From 1 July 2009, the general exemption available for Australians working overseas for over 90 consecutive days will now only apply to income earned:

  • as an aid or charitable worker employed by a recognised non-government organisation; or
  • as a government aid worker; or
  • as a specified government employee (for example, defence and police force personnel deployed overseas).

Further, income earned by an individual employed on an overseas project approved by the Minister for Trade as being in the national interest will remain exempt, as provided for by existing rules.

To avoid Australians paying double-taxation, a tax offset will generally be available for foreign tax paid on foreign employment income.

Employee Share Schemes
Substantial changes were made to the taxation of shares and options received under Employee Share Schemes in the 2009 Federal Budget. These changes apply to shares and options acquired after 30 June 2009.

Firstly, employees receiving shares or options under Employee Share Schemes can no longer choose to defer taxation on their discount. Instead whether a share or option is subject to taxation upfront or later is dependant on the characteristic of the employee share scheme. Also, the $1,000 upfront concession/tax exemption is limited to employees with a taxable income of less than $180,000 after adjustment for negative gearing losses, fringe benefits and salary sacrifice.

Use of Non-Commercial Losses
From the 2009/10 year, taxpayers with adjusted taxable income more than $250,000 is no longer able to offset losses from non-commercial business activities against income from other areas such as investment income or salary. However, taxpayers will have the ability to seek an exercise of discretion from the Commissioner of Taxation to ignore the new rules where exceptional circumstances exist or where the business being carried on is independently assessed as commercially viable.

EFT Refunds
From 1 July 2013 individuals expecting a tax refund will need to enter their bank account details including BSB and account number when lodging using the electronic lodgment service.