What is Division 296 tax?

Division 296 tax is an additional tax that may apply if your total superannuation balance across all super funds exceeds $3 million at the end of a financial year. The tax is intended to reduce the tax concessions available on earnings relating to super balances above this threshold. If your total superannuation balance exceeds $3 million at 30 June, the Australian Taxation Office (ATO) may assess an additional tax on a portion of your superannuation earnings relating to the part of your super balance above this threshold. The tax is assessed and administered by the ATO, not by GESB. If you receive a Division 296 tax liability from the ATO, you can choose to pay the tax personally or release money from your super to pay it.

How is Division 296 tax calculated for Gold State Super and West State Super?

If you are a member of West State Super or a defined benefit scheme, including Gold State Super or the WA Public Sector Pension Scheme, additional valuation methods may be required to determine the value of your superannuation interest for Division 296 purposes. The valuation and reporting requirements for defined benefit interests are prescribed under legislation and administered through reporting to the ATO. Some superannuation interests may be excluded from Division 296 tax under the legislation, including certain constitutionally protected fund interests held by current or former State higher level office holders.

Division 296 tax is a complex area of taxation. For more information, visit the ATO website or seek advice from a qualified financial adviser.