The recent proposals announced in the 2018/19 federal Budget are, generally good news for financial planners and clients. They present opportunities for clients to potentially utilise extra cash-flow to help them achieve financial goals and objectives.
As an example;
Creation of the Low and Middle Income Tax Offset (LaMITO) and MTR movement
Effective date: July 1, 2018
A new tax offset, the Low and Middle Income Tax Offset (LaMITO), is proposed to be introduced for a period of four financial years starting in 2018/19. A client’s LaMITO will be based on their taxable income as shown in the table below.
*Also, in 2018/19, the upper threshold of the 32.5 per cent tax bracket is also proposed to be increased from $87,000 to $90,000.
There are a number of ways clients can look to use this additional after-tax income. Contributing to super (or a tax effective investment bond) may be a good option for those who do not need the additional income to meet their living expenses. For Super, after tax contributions may be particularly beneficial for those who qualify for the co-contribution.
The information contained in this publication is based on the understanding KeyInvest (ABN 74 087 649 474 AFSL No. 240667) has of the relevant Australian legislation as at the date shown in this publication.
The information contained in this publication is of a general nature only and is intended for use by financial advisers and other licensed professionals only. It must not be handed to clients for their keeping nor can any copies of sections of this publication be given to clients. KeyInvest is not a registered tax agent under the Tax Agent Services Act 2009. We recommend that your client be referred to their registered tax agent or legal adviser prior to implementing any recommendations that you may make based on the information contained in this publication.