Labor Party’s Superannuation and Tax Policies in the 2019 Election

The Major Party’s Superannuation and Tax Policies
The federal election has been called for May 18 and both major parties have outlined their superannuation and tax policies. With the federal election only weeks away many of our clients have been asking what the major political parties’ policies are that may impact their SMSF, individual taxation circumstances or personal investments. Here’s what Labor Party proposes.
If you would like more information on a particular policy announcement, please do not hesitate to contact our office to set up a time to discuss any requirements you may have.

Australian Labor Party

Superannuation

• Disallowing refunds of excess franking credits from 1 July 2019 – this would mean SMSF members in pension phase no longer receive refunds for the franking credits they receive for their Australian share investments.
• Banning new limited recourse borrowing arrangements.
• Reducing the post-tax contributions cap to $75,000 per year down from $100,000.
• Ending the ability to make catch-up concessional contributions for unused cap amounts in the previous five years.
• Ending the ability for individuals to make personal superannuation tax-deductible contributions unless less than 10 per cent of their income is from salaries.
• Lowering the higher income 30per cent super contribution tax threshold from $250,000 to $200,000.

Taxation

• Labor supports the Stage 1 tax cuts and will match the $1,080 low and middle-income tax offset. From 1 July 2018, individuals earning below $37,000, will get a $350 a year tax offset, with this amount increasing for those earning between $37,000- $48,000 to the maximum $1,080 offset.
• Introduce a 30 per cent tax rate for discretionary trust distributions to people over the age of 18.
  Will limit negative gearing to newly built housing from January 1 2020. (Existing investments are grandfathered under the current law)
• Reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent. (Existing investments are grandfathered under the current law)
• Limit the deductions for the cost of managing tax affairs to $3,000.

How can we help?

If you have any questions or would like further clarification in regards to how the above policies may affect you, please feel free to contact us to arrange a time to meet so that we can discuss your particular requirements in more detail.