What is Division 293 tax?
Division 293 tax is being introduced from the 2012–13 year to reduce the tax concession on superannuation contributions for individuals with income greater than $300,000 a year. ATO has recently started issuing the first assessments.
The Division 293 tax was announced as part of the 2012 Federal Budget as an additional tax on superannuation contributions for higher-income earners. The additional tax, which applies broadly to taxpayers whose income exceeds $300,000, increases the concessional tax rate applied to contributions to Australian superannuation funds from 15% to 30%. By signing a release form taxpayers can direct that the additional tax is paid by the superannuation fund instead of from their own net income, but nevertheless this change will have a significant impact on the retirement funds of high-income individuals.
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