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TAX UPDATES
from Manningham June 2022 Edition
by Find
2022 TAX UPDATES
Potential end for Div 7A and sub-trust arrangementsa
SA COVID-19 stimulus and relief package
A draft determination has changed the ATO’s position on how sub-trust arrangements apply within the context of Div 7A. Effectively, when a corporate beneficiary and trustee of the trust are ultimately the same people, Div 7A will apply directly to unpaid present entitlements (UPEs). The assumed provision of financial accommodation in practice means that sub-trust arrangements will have no benefit when it comes to deferral of tax or repayments of loans. When finalised, the determination will apply from 1 July 2022. A consultation period has recently been extended to 29 April 2022 and stakeholders are encouraged to have their say with the ATO.
Individuals who are currently in receipt of an Australian government allowance or pension will receive a one-off payment of $250 to ease the cost of living pressures. Certain concession card holders will also get the payment. Originally announced in the 2022 Federal Budget, this one-off payment has been legislated through parliament and will be exempt from tax. The payment will also be exempt from counting towards and individual’s income for social security purposes. It is expected that the payments will flow through to eligible recipients from 28 April 2022.
Individuals who are currently in receipt of an Australian government allowance or pension will receive a one-off payment of $250 to ease the cost of living pressures. Certain concession card holders will also get the payment. Originally announced in the 2022 Federal Budget, this one-off payment has been legislated through parliament and will be exempt from tax. The payment will also be exempt from counting towards and individual’s income for social security purposes. It is expected that the payments will flow through to eligible recipients from 28 April 2022.
Throughout the COVID-19 pandemic, the South Australian Government has implemented a range of stimulus payments for residents and businesses.
From December 2021, density restrictions in place may have meant that your client may have experienced a decline in turnover.
These support measures included:
• automatic payments for those also that previously received the COVID-19 Tourism and Hospitality
Support Grant • automatic payments for gym who qualified for the Additional COVID-19 Business Support Grant • one-off grants for other eligible businesses that experienced a reduction in turnover, and • new grants available for major events that were cancelled or postponed.
In the 2022 Federal Budget, a number of South Australian grants were added to the non-assessable nonexempt list, meaning they are tax free for businesses who received them.
For previous measures that were in place in South Australia, refer to our state COVID-19 page.
Announcement(23-Feb-2022) Consultation period(29-Apr-2022) Released
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(29-Mar-2022)
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(29-Mar-2022)
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(29-Mar-2022)
2022 TAX UPDATES
In its response to the current COVID-19 lockdowns across August 2021, the Queensland Government implemented support grants for businesses across the state. The support packages were jointly funded by the Commonwealth and Queensland governments. Grants of up to $15,000 were available to eligible small and medium businesses across all industries. Support payments of up to $30,000 were available to large hospitality and tourism businesses impacted by the border closure. Applications for this grant closed in November 2021. A recent announcement by the federal government makes the 2021 COVID-19 Business Support Grant non-assessable non-exempt income. A COVID-19 cleaning rebate of up to $10,000 is still currently available for eligible small and medium businesses and not for profit organisations. Applications for the cleaning rebate are available until 30 June 2022.
Announced: 8-Apr-2020 Updated: 8-Apr-2022
Apprentice wage subsidy programs
All eligible businesses who employ an apprentice between 5 October 2020 and 30 June 2022 are eligible to receive a 50% wage subsidy. The wage subsidy is available for 12 months from commencement of employment. The maximum available subsidy is $7,000 per quarter per apprentice. This wage subsidy is a stimulus payment announced to effectively boost employment for young people and help businesses transition away from the COVID-19 downturn. These payments will be received via the Australian Apprentices Incentives Program. This program currently services employers by providing cash payments when apprentices meet certain targets. Another program for apprentices that was in place prior to 5 October 2020 dealt with keeping apprentices employed (as opposed to employing new apprentices). These subsidies were to combat rising unemployment and an expected economic downturn due to COVID-19. The wage subsidy was based on which apprentices remained in employment with their employer on 1 March 2020 and 1 July 2020. Originally, only small business employers were eligible to participate. From 1 July 2020, the government extended the measure to include medium-sized businesses. The original wage subsidy commenced for employers from 1 January 2020 and ran through to 31 March 2021.
Announced: 12-Mar-2020 Updated: 12-Apr-2022
Temporary fuel excise cut and fuel tax credits
Excise and excise-equivalent customs duty that applies to petrol and diesel will be temporarily reduced by 50%.
The reduction of the fuel excise will be in place for 6 months, beginning at 12:01am on 30 March 2022 and ending at 11:59pm on 28 September 2022.
The new temporary excise rate of 22.1 cents per litre will bring excise below the road user charge for businesses who claim fuel tax credits.
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(30-Mar-2022)
Minimum drawdowns for superannuation pensions have been halved again for the 2022–23 income year. This extension means that the reduction of minimum drawdowns will be available for self-funded retirees from 1 July 2019 through 30 June 2023.
This measure is intended to support retirees in managing the impact of the:
Announced: 22-Mar-2020 Updated: 12-Apr-2022
• recent volatility in financial markets, and • prevailing low interest rates on their retirement savings.
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