The Australian Taxation Office has made some key policy changes. See an overview of the changes below:
Private health insurance statements
From 1 July 2019, health insurers are no longer required to send private health insurance statements. Previously they were required to send statements by 15 July each year, it is now optional to send this information.
Private health insurance information will be available in the pre-fill report, usually by mid-August. If it is not populated by then, taxpayers may need to request a statement from their health insurer.
It is important to correctly report private health insurance information as we use it to calculate:
- private health insurance rebates taxpayers are entitled to
- the Medicare levy surcharge, if applicable.
Low and middle income tax offset
Taxpayers may be eligible for an income tax offset if:
- they are an Australian resident for income tax purposes
- their taxable income is in the appropriate income range.
They do not have to claim this offset. We will work it out for them when their tax return is lodged. If the changes proposed in the 2019–20 Budget become law after 1 July 2019 we will automatically amend assessments – no action will be required by you. The offset can only reduce the amount of tax they pay to zero and it does not reduce their Medicare levy.
First home super saver scheme
If a taxpayer requested the release of an amount under the First home super saver (FHSS) scheme during the 2018–19 income year, they must include in their 2019 tax return:
- any assessable FHSS amount
- the tax withheld amount.
They will receive a payment summary from us showing the assessable FHSS amount and tax withheld.
If they requested a release during the 2018–19 income year, they must include the amount in their 2019 tax return, even if they did not receive the amount until after 30 June 2019.
Increasing access to company losses
On 1 March 2019, legislation was passed that will supplement the current ‘same business test’ for losses with a more flexible ‘similar business test’. The new test will expand access to past year losses when companies enter into new transactions or business activities.
The similar business test allows a company (and certain trusts) to access losses following a change in ownership where its business, while not the same, is similar, having regard to the:
- extent to which the assets that are used in its current business to generate assessable income were also used in its former business to generate assessable income
- extent to which the activities and operations from which its current business is generating assessable income were also the activities and operations from which its former business generated assessable income
- identity of its current business and the identity of its former business
- extent to which any changes to the former business resulted from the development or commercialisation of assets, products, processes, services, or marketing or organisational methods of the former business.
As a test for accessing past year losses, the ‘similar business test’ will only be available for losses made in income years starting on or after 1 July 2015.
The ‘same business test’ and the ‘similar business test’ will be collectively known as the ‘business continuity test’.
Click here to read the full article and to see the full overview of changes. Make an appointment with PWS Advisory Group to discuss how these changes effect you personally or professionally on 03 9699 9422 or email firstname.lastname@example.org.