Division 293 Tax

Division 293 tax is a tax paid by the SMSF or a Member when the Member earns over $300k. There is a list of income types used by the  ATO to assess if the $300k cap has been reached.

This was announced in the 2012 Federal Budget as an additional tax on superannuation contributions for higher income earners. From early February 2014, the Tax Office has started issuing Division 293 tax notices of assessment to affected individuals for the 2012-2013 financial year.

The tax rate of 15% apply to any excess above the $300,000 threshold. This extra 15% tax can then be paid by the SMSF or the Member in an individual capacity.

Who will be liable for Division 293tax?

If your personal taxable income for the 2012/13 or later tax years is more than $300,000 and you’ve made concessional contributions to super, you will receive a Division 293 tax assessment.

Examples

For two examples from the ATO on how the Div 293 tax is calculated, see the ATO website here and here.

Conclusion

Our initial understanding was that this tax has been scrapped, as it was too difficult to administer. But this Div 293 Tax is now alive and kicking.

For more information on taxation in SMSF’s see our main Tax page.

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Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.

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