Yep, here’s another post on the Federal Budget, but this one only offers three key points of speculation from the insolvency practitioner’s point of view…
- The Federal Government in its 2017 Federal Budget has put the onus on residential property purchasers to pay the GST component on the purchase contract to be remitted directly to the Government. We wonder if this is a reaction to the volume of insolvencies and/or tax collection issues arising in the building/construction industry in recent years.
- Usually, you can’t touch your superannuation until retirement age, but in the new Budget Scheme, you can make voluntary contributions to your super and later withdraw it to assist buyers in making a deposit on your first home. We are interested to see how the mechanics work, in the context of when and how the monies are released from the superannuation funds. Conceivably, without a proper framework, people could take advantage of the system…signing contracts, accessing super, and subsequently the contract is terminated (purposely, or inadvertently): could they keep the super payout?
- Limiting the amount of tax payable by an entity can often result in better cash flow for business trade, making an investment, or to repay debt. With company tax rates reducing compared to the personal top marginal tax rates, which are staying relatively high when Medicare and the temporary budget repair levies are applied, it presents an opportunity to review which structure—sole trader vs company structure—businesses use.