An archived summary of the 2020 Federal Budget, delivered in October rather than early in the year due to the pandemic. Remember, a Budget is a proposal – until items receive Royal Assent and are legislated, there’s not much to act on.
For individuals
Personal tax cuts from 1 July 2020: the Low-Income Tax Offset increased from $445 to $700; the top threshold of the 19% rate rose from $37,000 to $45,000; and the top threshold of the 32.5% rate rose from $90,000 to $120,000. The Low- and Middle-Income Tax Offset was extended to the end of 2020-21. Granny flat arrangements with a formal written agreement were made exempt from Capital Gains Tax, and two one-off $250 support payments were provided to eligible income-support recipients.
For businesses
Temporary full expensing allowed eligible businesses (aggregated turnover under $5 billion) to deduct the full cost of eligible capital assets first used or installed by 30 June 2022. The enhanced instant asset write-off was extended, and loss carry-back was introduced, allowing companies with turnover under $5 billion to carry back tax losses to offset previously taxed profits.
Superannuation reform
When a person starts a new job and doesn’t nominate a super fund, the employer became required to contribute to the employee’s existing super account rather than the employer’s default fund, with details retrievable from ATO online services. We kept clients up to date as further detail was released.