By now I’m sure you have heard that the Federal Government proposes to introduce a levy to help pay the damage bill caused by the floods in Queensland and Victoria.
Firstly, the levy will begin on 1 July 2011 and end on 30 June 2012 i.e. last for 1 year only.
A levy of 0.5% will be applied on that part of an individual’s taxable income between $50,001 and $100,000.
A levy of 1% will be applied on that part of an individual’s taxable income above $100,000.
No levy is payable where the person has income of $50,000 or less.
The levy is calculated as follows:
(Taxable income – applicable threshold) x applicable levy percentage
For example, if your taxable income was $75,000 you pay a levy of $125 calculated as ($75,000 - $50,000) x 0.5%.
In our last newsletter, we advised that unless a determination is made to the contrary, we would expect that the Special Disaster Flood Assistance Grants ($5,000 and additional $20,000) would be subject to GST and income tax.
Well, a determination has been made, which states that no income tax is payable on these grants.
The Government has also announced that the Disaster Income Recovery Subsidy is also exempt from tax.
Following the Queensland and Victoria floods, the Tax Office has announced a number of initiatives to assist those affected by the flood.
- Automatic deferral of December monthly activity statements until 21st February 2011
- Deferral of activity statement lodgements
- Additional time to pay tax debts without interest being charged
- Fast-tracking refunds
If you would like to know how these concessions might help you, please contact Ellingsen Partners.
In addition to your main residence being exempt from capital gains tax, the land “adjacent” to the dwelling is also exempt if:
- During the period you owned it, the land is used mainly for private and domestic purposes in association with the dwelling, and
- The total area of the land around the dwelling, including the land on which it stands, is not greater than 2 hectares (5 acres). If the land used for private purposes is greater than 2 hectares (5 acres), you can choose which 2 hectares (5 acres) is exempt, but the land you choose must include the land on which the dwelling is built.
If you sell any of the land adjacent to your dwelling separately from the dwelling, the land is not exempt. It is only exempt when sold with the dwelling.