As part of the 2016 budget changes, the government lowered the threshold for division 293 tax from $300,000 to $250,000, effective 1 July 2017.
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Division 293 tax is applied to certain concessional contributions where an individual’s combined income and low tax contributions for a year exceed $250,000.
Lump sums can also be included for division 293 purposes depending on the member’s age, the amount paid and the components of the lump sum.
In an online update, the ATO said that with the system upgrades accommodating the law changes for the 2017/18 financial year, it will begin issuing additional tax on concessional contributions (division 292) assessments.
“Funds should be prepared for potential increase in release authorities, approximately 50,000 over the January to February period,” it said.
The ATO said that it expects to issue around 90,000 assessments.
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