What you need to know about Division 293 assessments in 2019?
The Australian Tax Office (ATO) has been issuing ‘Additional tax on concessional contributions (Division 293) assessments’ with respect to liabilities relating to the 2018 income year.
Division 293 imposes an additional 15% tax on certain concessional (i.e., taxable) superannuation contributions. It applies to individuals with income and concessional superannuation contributions exceeding the relevant annual threshold.
This means that impacted individuals may ultimately pay 30% tax (when the Division 293 tax is combined with the existing 15% contributions
tax) with respect to:
- superannuation contributions made on their behalf as a result of employer super guarantee obligations or effective salary packaging arrangements; or
- personal deductible contributions.
The ATO reportedly expects to issue about 90,000 assessments during the first two months of 2019. Payment needs to be made by the due date to avoid any additional interest charges, although alternative payment methods are available (including the ability to release money from any existing super balances).
Source believe that more individuals will receive Division 293 assessments (and be required to pay the additional 15% tax) for the 2018 financial year due to a drop in the applicable threshold from $300,000 to $250,000. Additionally, one of the key ALP tax policies for the upcoming Federal Election includes a further reduction of this Division 293 threshold from $250,000 to $200,000.
At Verus Accountants and Advisors, we have tax experts to further explain on Division 293 and how we can help you to scrutinize your taxation matters in accordance to this tax division. Call us today or drop by our office in Gordon, NSW.