Whilst there were no significant taxation proposals in this year’s Budget, the Government has made some relatively conservative changes to FBT exemption and employee share schemes.
FBT exemption for electronic devices
To help reduce red tape, the Government will expand the Fringe Benefits Tax (FBT) exemption for work-related portable devices from April 1 2016. Small businesses with an aggregated annual turnover of less than $2 million that provide employees with more than one qualifying work-related portable electronic device will still be able to access the exemption.
Additional items that have substantially similar functions as the first device, will still be allowed on the condition that they are used to perform different tasks. Small business employees will benefit by staying connected in the digital economy.
FBT: meal and entertainment
A $5,000 grossed-up cap will be introduced for salary sacrificed meal entertainment and entertainment facility leasing expenses for employees of not-for-profit organisations from 1 April 2016. The cap previously sat at $30,000, allowing charities and other similar groups to compete with the private sector for the attention of prospective employees. Not-for-profit employees can now salary sacrifice meal entertainment benefits without reporting them. In addition, their employers will not have to pay fringe benefits tax.
Employee share schemes
Expanded tax concessions for employee share schemes from 1 July 2015, will allow employees to share in and gain from the future growth and success of the business.
The new start-up concession ensures employees are not liable to pay tax up-front until they are able to grasp a benefit from the share options.
Other measures
The Government tightened access to pension payments as a result of decreases in the assets test. The maximum value of assets outside the family home a couple can hold while still qualifying for a part pension will be reduced from $1.15 million to $823,000. Pensioners with substantial private assets will have to draw on slightly more of their assets to maintain their current income levels of retirement.
The asset test taper rate will be increased from $1.50 of pension per fortnight to $3 of pension for each $1,000 of assets over the relevant assets test threshold from 1 January 2017. It will allow those with moderate assets to receive a full or increased pension.
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