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What’s new this year? 2016

A list of new initiatives incorporated in this year's Individual tax return instructions.

Last updated 25 May 2016

Changes to gender identifiers

The Attorney General’s guidelines on the recognition of sex and gender recognise that individuals may identify and be recognised within the community as:

  • a gender other than the sex (male or female) they were assigned at birth/infancy, or
  • an indeterminate sex and/or gender.

The guidelines standardise the way the Australian government collects and uses sex/gender information. We no longer ask for the taxpayer's sex on page 1 of the form. The Spouse details section now asks for gender and provides three options to select from. This item has been retained for administrative purposes.

Accelerated depreciation for primary producers

New laws have passed that allow primary producers to:

  • immediately deduct the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills
  • depreciate over three years the cost of fodder storage assets such as silos and tanks used to store grain and other animal feed.

This measure applies to eligible assets and expenditure incurred from 7.30pm (AEST) 12 May 2015.

Net medical expenses tax offset phase out

From 1 July 2015, the offset is only available to taxpayers with net expenses for disability aids, attendant care or aged care. Claims for the offset are limited to these types of expenses. The income testing of the offset will remain.

The offset will be abolished from 1 July 2019.

See also:

  • Net medical expenses tax offset phase out.

Small business income tax offset

From 2015–16 an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

  • net small business income from sole trading activities
  • share of net small business income from a partnership or trust
  • other amounts received because the individual is a partner or beneficiary in a small business entity, such as farm management repayments.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% up to $1,000 each year.

We will work out the offset based on the total net small business income reported in your income tax return.

Expanding accelerated depreciation for small businesses

New laws have passed that allow small businesses to claim an immediate deduction for assets they first acquire and start to use, or have installed ready for use, provided each depreciable asset costs less than $20,000. This temporarily replaces the previous instant asset write-off threshold of $1,000.

This measure started at 7.30pm (AEST) 12 May 2015 and will end on 30 June 2017.

The balance of the general small business pool is also immediately deductible if the balance is less than $20,000 at the end of an income year that ends on or after 12 May 2015 and on or before 30 June 2017 (including an existing general small business pool).

The 'lock out' laws have been suspended (these prevented small businesses from re-entering the simplified depreciation regime for five years if they had opted out) until the end of 30 June 2017.

Immediate deductibility for start-up costs

The law has been extended to allow for certain start-up expenses, including costs associated with raising capital, to be immediately deductible where they are incurred by a small business entity or an entity that is not in business. These provisions apply from 2015–16.

Exploration development incentive

If you have received exploration credits directly or indirectly from your shareholdings in a greenfields minerals explorer, you can now claim your tax offset by completing item T9.

Employee share schemes

The changes to the tax treatment of employee share schemes took effect on 1 July 2015 and apply to ESS interests issued on or after that date. Some existing rules have changed and some new concessions apply to employees of start-up companies. The changes include:

  • when options are taxed
  • increasing the maximum ownership limit to 10% of the total shares (up from 5%)
  • increasing the deferral period to 15 years (up from seven years) for tax deferred schemes.

Zone offset

From 1 July 2015, eligibility for the zone offset is based on your usual place of residence. If your usual place of residence was not in a zone, you are not eligible for the zone tax offset. Certain types of workers are likely to be affected, for example, fly-in-fly-out workers.

Work-related car expenses

The four methods of car expense deduction have been reduced to two. You may now only use the 'cents per kilometre' or 'logbook' methods to calculate your work-related car expenses.