ONLY MORE TAX, NONE OF THE RELIEF. Yesterday we finally had the updated draft legislation released for the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill to be passed before 31 March 2024.
This bill does not include any of the promised tax relief. That is, there is no:
· Change to the interest deductibility rules,
· Reduction of the bright-line period, or
· Change to personal marginal tax thresholds.
This does not mean these are not coming, just that we must wait a bit longer. This doesn’t help with any uncertainty though. Particularly for people wanting to buy or sell property.
The bill does confirm the increase in the trust tax rate to 39% from 1 April 2024. There were some comments in the media that the Government might look to a two-tiered trust tax rate. We do have a small concession in that space, but it is much less than some commentators were hoping for.
What the Government has instead included is a de minimis threshold of $10,000. This means where the taxable income in the trust is $10,000 or less the rate will remain at 33%. Unlike a marginal rate, this is an all or nothing test so a trust with $10,001 will pay tax at 39% on all income.