When your Division 296 tax liability payment is due
Payment of Division 296 tax is due 84 days from the date of your Division 296 tax notice of assessment. This is excluding amounts attributable to a defined benefit interest that are not in retirement phase which are deferred to a Division 296 tax deferred account. See Division 296 tax for defined benefit members.
If the Division 296 tax liability is not paid by the due date, general interest charge will accrue.
If there is an amendment to your notice of assessment that increases the amount of Division 296 tax, you will be given 84 days from the date of the notice of amended assessment to pay any additional tax payable. Shortfall interest charge may also apply. The due and payable date of your original Division 296 tax assessment will not change.
How to pay Division 296 tax
You can pay your Division 296 tax:
- with your own money – see how to pay
- by releasing money from super – see Releasing money from super for a Division 296 tax liability, or
- a combination of these.
Paying Division 296 tax by the due date means you will avoid paying interest.
Payment of Division 296 tax is not deductible.
If your Division 296 tax has been deferred, you can still pay this voluntarily and avoid any annual interest. See How to voluntarily pay your deferred Division 296 tax.
Releasing money from super for a Division 296 tax liability
If you choose to pay all or part of your Division 296 tax liability by releasing money from super, you will need to elect to do this via ATO online services through myGov or ask your tax agent to do this for you.
Information on how to elect to release money from super will be detailed in your Division 296 tax notice of assessment. You have up to 60 days from the date of the notice to make your election.
The 60-day period is solely for deciding whether to release money from your super. It doesn't change the due date for payment of your Division 296 tax liability. Even if you elect to release money from super, your liability must be paid by the due date on your notice of assessment to avoid general interest charge.
Once the election is submitted, we will send a release authority to your nominated super fund(s) to pay us the amount you have specified. The money received from your fund(s) is then used to pay your outstanding Division 296 tax liability. If the money received from your fund is more than the Division 296 tax liability, any remaining amount will be used to pay other tax debts and Australian Government debts before any balance is refunded to you.
Note: Once you have made an election to release money, it cannot be withdrawn or reversed.
If you don't pay your Division 296 tax
If you don't pay your Division 296 tax due and payable amount by the due date, we may issue your super fund(s) with an authority to release funds to pay your Division 296 tax.
General interest charge (GIC) will apply to your Division 296 tax debt until it is paid in full.
Incorrect Division 296 tax assessment
If you believe your Division 296 tax assessment is incorrect, we recommend you first speak with your super fund(s) to confirm the amounts they have reported to us that we used to calculate your Division 296 tax. If your fund's reporting is incorrect, they will need to amend their reporting before your Division 296 tax assessment can be amended.
If you still disagree with your assessment, you can lodge an objection if you believe either:
• your Division 296 tax has been calculated incorrectly
• Division 296 tax may have been applied to your account in error.