February 2014 Newsletter 

In this edition:

Welcome

Recruitment for small to medium business owners by Malcolm Waldock, Director TalentID Leaders

Investment thoughts for 2014

Division 293 Tax Notices issuing soon

The Australian Taxation Office (ATO) has just advised that it plans to start issuing Division 293 tax notices of assessment for the 2012/2013 financial year early this month, and individuals affected should expect to start receiving them soon after.

The tax imposed by Division 293 was announced in the 2012 federal budget as a measure to reduce the superannuation tax concessions received by high income individuals. The measure was introduced as individuals on high incomes receive a tax deduction on concessional contributions at 45%, while only paying 15% tax in their super fund, ultimately giving them a 30% super concession.

An individual is generally liable to pay Division 293 tax if their income and low-tax contributions are greater than $300,000 for the year, and the tax will be applied to the lesser of the low-tax contributions and the amount above the $300,000 threshold.

The division 293 tax is levied at a rate of 15% on the taxable contributions made by the individual during the year, effectively reducing the 30% concession to 15% (closer to that enjoyed by taxpayers on lower incomes).

To determine an individual's liability, the ATO has indicated that it will look at income reported on income tax returns and contributions reported in members' contribution statements and/or self-managed superannuation fund (SMSF) annual returns.

Generally, the notices of assessment will state:

• Total earnings for Division 293 tax purposes;
• Taxable contributions;
• The amount of Division 293 tax that is due; and
• The prescribed due date for payment (generally 21 days after the assessment is issued).



Individuals are responsible for the payment of the tax, however they can choose to sign a release form which gives authority to their superannuation fund to pay it on their behalf.

Goodwin Chivas & Co will be monitoring the issuing of these assessments to ensure they are correct and match with each individual's personal circumstances. 

Should you have any questions in relation to any aspect of Division 293, you should contact your Goodwin Chivas & Co advisor.