An additional 15% tax (Division 293 tax) applies to certain concessional contributions made by or on behalf of very high income earners.
|
Division 293 tax
|
|
Income threshold – 2019/20
|
$250,000
|
|
Income assessed
|
The sum of an individual’s:
- taxable income (excluding the taxable component of a superannuation lump sum taxed at 0% ie the amount within the low rate cap)
- certain family trust distributions excluded from assessable income
- reportable fringe benefits total
- total net investment loss
- low tax contributions
|
|
Low tax contributions (LTCs)
|
Concessional contributions (CCs) excluding:
- excess CCs, and
- CCs for State higher level office holders to constitutionally protected funds
|
|
Tax treatment of LTCs
|
- If income exceeds $250,000, additional 15% tax applies to the lesser of:
- income above $250,000, and
- LTCs
- Excess CCs not subject to Division 293 tax (instead excess CC tax arrangements will apply
- Division 293 tax is levied on individual, not super fund (but all or part may be withdrawn from a fund)
|
|
Special rules
|
Special rules apply for:
- defined benefit funds
- State higher level office holders
- Commonwealth judges and justices
- temporary residents departing Australia
|
Post your comment on this topic.