Summary of new legislation that came into force 1 July 2007
by Hamish McDouall, 05/07/07

Well, with the completion of yet another financial year and the commencement of a new one I thought I might recap what changes have come into force as of 1 July 2007. I have included a brief summary of the main changes below.

Superannuation – the area that has seen the most drastic changes has been superannuation, on the whole most of the changes have only increased its attractiveness as an investment vehicle;

• All lump sum and pension withdrawals from superannuation will now be tax free from age 60;

• Concessional Contributions Limits - $50,000 limit on Concessional Contributions, or $100,000 per annum Concessional Contribution limit for those aged 50 + (until 2011/2012).

• Non-Concessional Contribution Limits -  $150,000 non concessional (undeducted) contribution limit with the ability to bring two years contributions forward such that you are able to contribute $450,000 in one year and nothing the following two;

• Concessional contributions can now be made up until age 75, assuming the work test is satisfied.

Marginal Tax Rates

From 1 July 2007 the 30% marginal tax rate bracket will kick in at $30,000 instead of the current $25,000.

From 1 July 2008 the 40% marginal tax rate will kick in at $80,000 (currently $75,000), and the 45% marginal tax will kick in at $180,000 (currently $150,000).

Changes to the low income tax offset will mean that those earning less than $11,000 will pay no tax.

Self Employed Individuals – previously treated differently, this has now been changed so that self employed individuals are now eligible to receive the Government Co-Contribution and are also able to claim a 100% tax deduction for concessional contributions.