2021 Budget Summary

May 12, 2021

Budget 2021-11

2021 Budget Summary

Tax-related measures announced included:

  • Personal tax rates – no changes were made to personal tax rates. The Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25 as already legislated.
  • LMITO retained for 2021-22 – provides a reduction in tax of up to $1,080.
  • Temporary full expensing extended – the Government will extend the 2020-21 temporary full expensing measures for 12 months until 30 June 2023 – businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.
  • Loss carry-back extended – the loss years in respect of which an eligible company (aggregated annual turnover of up to $5 billion) can currently carry back a tax loss (2019-20, 2020-21 and 2021-22) will be extended to include the 2022-23 income year.
  • Individual residency test reformed – the Government will replace the existing tests for the tax residency of individuals with a primary “bright line” test under which a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
  • Employee share schemes – the Government will remove the cessation of employment as a taxing point for the tax- deferred employee share schemes.
  • ATO debt recovery – the AAT will be given the power to pause or modify ATO debt recovery action in relation to disputed debts of small businesses.
  • Self-education expenses – $250 threshold to be removed.

Please find below links to some useful documents:
Federal Budget 2021
TAX BANTER Federal-Budget
NTAA 2021.22 Budget Handout

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