In this issue of Tax Talk, we cover:
The various 2015 Budget changes that benefit small businesses owners coming into the end of the FY16 tax year.
The instant asset write-off rules for business assets less than $20,000. From 1 July 2017, the threshold will return to $1,000
Small business restructure capital gains tax exemption from the 1 July 2016. Small businesses will be able to change the legal structure of their business without incurring any income tax liability when assets are transferred by one entity to another.
From 1 July 2015, small businesses are entitled to certain immediate deductions (such as accounting and legal fees) when starting up a small business.
For the 2015/16 income year, an individual is entitled to a 5% tax offset (up to $1,000) on the tax payable on the portion of their income that is from net small business income from sole trading activities; and/or their share of net small business income from a partnership or trust.
For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%. Of note is that the maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate.