I’m a sole trader whose income is 260k. I have decided to make 40k in personal concessional super contributions (using carry-forward unused cap contributions from previous years).
I understand that Division 293 tax is calculated based on “Division 293 income” (assessable income minus allowable deductions) combined with super contributions.
In this situation then, which case below shows the correct calculation for Division 293 tax:
- Division 293 income is 260k minus 40k = 220k. Combined income and super contributions is therefore 220k + 40k = 260k. Threshold exceeding 250k = 10k. Div 293 tax is thus 15% of 10k
- Division 293 income is 260k (ie personal super contribution is not counted as a deduction). Combined income and super contributions is therefore 260k+40k = 300k. Threshold exceeding 250k = 50k. Div 293 tax is thus 15% of 40k (the lesser of 40k and 50k)
I guess the question boils down to whether personal concessional super contributions are counted as an allowable deduction when calculating “Division 293 income”
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