Monthly Archives: March 2022

ATO’s changes to family trusts: no more using children to avoid taxes

The ATO has just released 4 tax rulings that will stop commonly used trust distributions to family members. It’s one of the most significant developments for the taxation of trusts in over two decades. As a result of these new ATO rulings, options to spread your trust income across your family members may be vastly limited; and family group overall tax payable will probably increase.

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Temporary full expensing of assets extended

Businesses will have another year to utilise the temporary full expensing of depreciating assets measure after it was extended to end on 30 June 2023. The measure was originally introduced to encourage business investment in the backdrop of the COVID-19 pandemic and allowed eligible businesses to deduct the full cost of eligible depreciating assets of any value. Building and other capital works, as well as software development pools do not generally qualify for full expensing. Neither do second-hand goods for certain entities. Special rules also apply to cars.

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Work test scrapped for super contributions: under 75s

Individuals aged between 67 and 75 will be able to make non-concessional and salary sacrificed contributions without the need to pass the work test or satisfy the work test exemption criteria from 1 July 2022. The removal of the work test from that date also allows individuals aged under 75 years of age to access the bring forward of non-concessional contributions in some cases. Personal contributions will also be affected, although now instead of having to pass the work test to contribute, the work test only applies if a deduction is sought.

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