1. Cents per kilometre rate for 2017 unchanged
The cents per kilometre rate for the 2017 income tax year will remain unchanged at 66c per kilometre.
You can use this method of working out your work-related motor vehicle expense deductions if you travel less than 5,000 business kilometres a year and you must keep a travel diary to evidence the amount of business kilometres travelled.
2. New 10% withholding obligation on purchasers of Australian property
From 1 July 2016, all purchasers of certain types of Australian property (whether purchased from a resident or foreign resident vendor) must withhold 10% of the purchase price, unless the transaction is excluded from these rules (e.g. the $2 million sale price exclusion for real estate) or the parties undertake certain actions before settlement date (e.g. obtain an ATO clearance certificate, residency declaration or apply to the ATO for a variation of the withholding rate).
Please note that the application of this 10% withholding rule is not just limited to purchases but applies to all acquisitions (e.g. a transfer of relevant property through a gift, divorce proceedings or other distributions such as in specie property distributions from trusts or from deceased estates).
Please contact us if you are buying real estate and know or suspect that the vendor is a foreign resident or has a foreign connection. Also, even if you are a resident vendor, we can help you to obtain an ATO clearance certificate or residency declaration so that the 10% withholding rule will not apply to you.
See our recent comprehensive Nexia alert, Buyer beware: more tax compliance from 1 July 2016 for more details.
3. Foreigners have to declare their interest in Australian agricultural land
To assist the ATO in keeping record of interests (e.g. ownership, lease or licence) of foreigners in Australian agricultural land, the ATO has released updated agricultural land registration forms.
Please contact us if you are a foreigner who has acquired or disposed an interest in Australian agricultural land, has changed residency status or has changed property type (e.g. from residential property to agricultural property) so that we can ensure your information is entered correctly on this agricultural land register.
4. Possible transitional arrangements for the $500,000 cap on non-concessional contributions
As you are aware, the Government recently proposed that a $500,000 lifetime non-concessional contributions cap of $500,000 would apply from 3 May 2016.
According to recent letter by the Treasurer, transitional arrangements may apply to allow additional non-concessional contributions to complete a contract (that was in place before 3 May 2016) to purchase an asset (after 3 May 2016), without breaching the propose $500,000 lifetime cap.
The ATO has extended the SuperStream deadline from 30 June 2016 to 28 October 2016 for small businesses (i.e. those with less than 20 employees). Please contact us for assistance to ensure that you are SuperStream compliant by 28 October 2016.