The ATO is issuing Division 293 assessments for liabilities arising in the 2018 income year, requiring additional tax to be paid by affected individuals.
Division 293 imposes an additional 15% tax on certain concessional superannuation contributions and applies to individuals with income and concessional superannuation contributions exceeding the relevant threshold. In the 2018 financial year, the applicable threshold dropped from $300,000 to $250,000 and the ATO therefore anticipates more than 90,000 assessments will be issued during just the first two months of 2019.
When the Division 293 tax is combined with the existing 15% contributions tax, affected individuals may end up paying 30% on:
- superannuation contributions made on their behalf as a result of employer super guarantee obligations or effective salary packaging arrangements; or
- personal deductible contributions.
If you receive a Division 293 assessment from the ATO, it is important that you make payment before the due date. There are alternative payment methods available, including the ability to release money from any existing super balance, however, you should ensure you act quickly to avoid incurring additional interest charges.
If you have questions or concerns about Division 293 assessments and whether you are likely to be affected, please do not hesitate to contact your team at OakWealth.
[Originally posted on the OakWealth Blog.]