Now the tax bat­tle be­gins

The Daily Telegraph (Sydney) - - Racing - AN­THONY KEANE

TAX was left alone in last week’s fi­nan­cial ser­vices royal com­mis­sion fi­nal re­port, but fu­ture changes loom large in the minds of mil­lions of Aus­tralians.

The up­com­ing fed­eral elec­tion has al­ready be­come a tax bat­tle­ground, with La­bor’s plans to scrap ex­cess frank­ing credit cash re­funds for hun­dreds of thou­sands of self­funded re­tirees spark­ing the most anger in re­cent weeks.

It also wants to stop neg­a­tive gear­ing tax de­duc­tions for all but new prop­er­ties, and re­duce the cap­i­tal gains tax dis­counts for fu­ture in­vest­ments.

H & R Block di­rec­tor of tax com­mu­ni­ca­tions Mark Chap­man said the Fed­eral Gov­ern­ment fired fresh shots last month when it an­nounced it would in­crease the in­stant as­set write-off for small busi­ness own­ers, from $20,000 to $25,000.

This al­lows them to in­stantly claim full tax de­duc­tions for any busi­ness items cost­ing less than $25,000 and would ben­e­fit more than two mil­lion small busi­ness own­ers, he said.

“No doubt we will get a lot more of that as we head closer to the elec­tion,” he said.

Mr Chap­man said tax­pay­ers should keep an eye on the tax de­bate and try to work out whether they would be win­ners or losers.

“As it’s an elec­tion year, there will be some pretty sig­nif­i­cant tax an­nounce­ments but I ex­pect most will be good news rather than bad news,” he said.

La­bor’s con­tro­ver­sial tax poli­cies were an­nounced well in ad­vance, some of them years ago, Mr Chap­man said. “That gives them space be­fore the elec­tion to an­nounce more good news,” he said.

Char­tered Ac­coun­tants Aus­tralia and New Zealand tax leader Michael Cro­ker said tax­pay­ers should not wait un­til tax time to start think­ing about their tax re­turn.

“Think about the tax poli­cies of the ma­jor par­ties and the im­pact on your fi­nances,” he said.

The Gov­ern­ment axed prop­erty in­vestors’ tax de­duc­tions for travel and some de­pre­ci­a­tion de­duc­tions, and land­lords only felt the changes in last year’s tax re­turns.

“Don’t make fi­nan­cial de­ci­sions based solely on po­ten­tial tax breaks,” Mr Cro­ker said. “If you’re spend­ing cash just to get a tax break, you may end up worse off.”

‘As it’s an elec­tion year there will be some pretty sig­nif­i­cant tax an­nounce­ments’ H & R Block’s Mark Chap­man

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.