FEDERAL BUDGET 2021-22 REVIEW

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Employee share scheme

• Removal of cessation of employment as a taxing point for the tax deferred employee share schemes.

Concessional corporate tax rate for medical and biotech patents income

• The Government will introduce a patent box tax. It will tax corporate income derived from patents at a concessional effective corporate tax rate of 17 per cent.
• The patent box will apply to income derived from Australian medical and biotechnology patents.

Intangible assets

• Ability to self-assess effective life of certain intangible assets – such as intellectual property and in-house software.

Small business and ATO debt

• The government will introduce legislation to allow small businesses to pause or modify ATO debt recovery action where the debt is being disputed in the ATAT.

Downsizer Contributions

• Eligibility age to be lowered from 65 to 60. This allows those over 60 who sell their place of residence to be able to deposit $300,000 into super from the sale of their residential property.

First Home Super Scheme

• The maximum amount of voluntary superannuation contributions that can be released under the FHSS scheme will be increased from $30,000 to $50,000.

Low income tax offset (LITO)

• The low income tax offset will also continue to apply for the 2021-2022 year.
• The maximum amount of the LITO is $700.
• The LITO will be withdrawn at a rate of 5 cents per dollar between $37,500 and $45,000 and then at a rate of 1.5 cents per dollar thereafter.

Residency test

• Any person who is physically present in Australia for 183 days or more in an income year will be an Australia tax resident.

Self- education expenses

• The government will remove the exclusion of the first $250 of deductions for any relevant self- education courses.

Childcare

• Increased subsidies from 01 July 2022 for families with more than one child aged five and under in childcare by adding an additional 30 percentage point subsidy for the second and third child.