Tax Changes for FY18

Key Highlights and Changes to Deductions

This tax time, there are some important new changes to deductions which apply to the 2017-2018 financial year including:

    • Individuals are not able to claim deductions for travel expenditure associated with their rental property if they are not carrying on a business of property investing.
    • From 9 May 2017, purchases of existing properties containing plant and equipment to be used for residential investment purposes may not be eligible for depreciation deductions. In addition, taxpayers cannot claim plant and equipment installed on or after 1 July 2017 if they have used it for private purposes.
    • The temporary budget repair levy of 2% no longer applies. Higher income earners will not be required to pay this levy for 2017-18.
    • Small businesses can claim an immediate deduction for depreciating assets costing less than $20,000 up until 30 June 2018. The Federal Government has proposed to extend this to 30 June 2019, however, this is not yet legislated.
    • From 1 July 2017, most taxpayers under 75 years old (including those aged 65 to 74 who meet the work test) are able to claim a deduction for personal super contributions regardless of their employment arrangement.

Now is an important time to review your business and financial affairs to help maximise any tax deductions you may be entitled to. Contrary to what many people think, tax deductions are not an automatic entitlement for taxpayers. For details about eligibility and substantiation requirements, speak with your accountant or contact our office.