We have summarised the key points from the 2021-2022 budget, that we believe will have the most impact on our clients.
Please keep in mind that all budget measures are proposals and will require the passage of legislation to become effective.
Summary points for Individuals
Low and middle income tax offset
The low and middle income tax offset (LMITO) was originally introduced for the 2019 financial year and was extended in the 2021 budget to expire on the 30 June 2021. The LMITO has been extended again to the 30 June 2022.
The LMITO offset amount is between $255 and $1,080 and the amount received is dependant on your taxable income. This is demonstrated in the below table:
| Taxable income | Offset |
| $37,000 or less | $255 |
| Between $37,001 and $48,000 | $255 plus 7.5 cents for every dollar above $37,000, up to a maximum of $1,080 |
| Between $48,001 and $90,000 | $1080 |
| Between $90,001 and $126,000 | $1080 minus 3 cents for every dollar of the amount above $90,000 |
Self-education expense deductions
To reduce compliance costs and simplify the income tax return the Government is removing the exclusion of the first $250 of deductions for prescribed courses of education. This measure will apply for the first income year after Royal Asset.
Individual tax residency rules
The government is proposing to replace the individual tax residency rules with a new easier to understand framework to provide certainty and reduce compliance costs for globally mobile individuals and their employers.
These changes will apply from 1 July following Royal Assent.
If you have any questions or concerns about the proposals from the Federal budget announcements, please contact your Ulton Advisor to discuss.
Want to learn more about the other announcements? We have broken the full budget down into 6 main categories for usability.
Source:
https://budget.gov.au/2021-22/content/factsheets/download/factsheet_tax.pdf
https://budget.gov.au/2021-22/content/bp2/download/bp2_2021-22.pdf