2019_Federal_Budget_May.pdf - Top five tax tips for...

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Top five tax tips for financial advisers from the 2019/20 Budget May 2019 Garry Payne ● Senior tax trainer ● TaxBanter Association accreditation: FPA CPD hours: 0.5, Dimension: N/A (FPA 010898). AFA CPD points: 0.5 (AFA 01022009). CPA Australia CPD points: 0.5 (CPA 000775). Note: The FPA Board has approved alignment of its dimensions to FASEA CPD Areas. Educational specifications Content level: Intermediate. AQF level: 7 . FASEA CPD Area: Kaplan Professional recommends: Technical Competence (30 minutes/0.5 hours). Knowledge area: Personal Taxation Issues (30 minutes/0.5 points). TPB : CPE (30 minutes/0.5 points).
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Top five tax tips for financial advisers from the 2019/20 Budget May 2019 Ontrack | 2 Overview The 2019/20 Federal Budget, handed down by Treasurer Josh Frydenberg in April, was widely described as an “election budget”, with the Federal Government aiming to strike a balance between retaining a surplus and spending to win votes. Treasury coffers have been boosted by strong commodity prices and personal taxes rising faster than wages. Broadly, the 2019 Federal Budget delivered the first surplus since 2008, personal tax cuts, cash handouts for energy payments to welfare recipients, and plenty of money for infrastructure projects. Ontrack asked Garry Payne, a senior tax trainer at TaxBanter, to review the changes most applicable to financial advisers as they look to assist and improve their clients’ financial position. The learning material also records the relevant announced policies which the Australian Labor Party will seek to implement should it win government in the May Federal Election. Learning outcomes After completing this learning content, you should be able to: discuss the broader issues framing this year’s Federal Budget outline the key changes to taxation for individuals assess the impact of changes to taxation of businesses describe the ALP’s key policies where these differ from the Coalition Government’s position.
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Top five tax tips for financial advisers from the 2019/20 Budget May 2019 Ontrack | 3 1. Business cash flow planning Private companies — delay to Division 7A changes Many small businesses will breathe a sigh of relief that the start date for proposed changes to Division 7A have been deferred from 1 July 2019 to 1 July 2020. If and when these changes come in, at their worst they could see private companies having to start to repay (subject to phasing-in or transitional measures) all of the quarantined pre-December 1997 loans and quarantined pre-December 2009 unpaid present entitlements (UPEs) in related trusts, currently sitting in their accounts, as well as all new UPEs. This includes both principal and interest. There are substantial amounts of money involved. It also means the beneficial measures will be deferred. These include simplified complying loan rules, a statutory self-correction mechanism, and safe-harbour rules in calculating values for private use of company assets.
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