Sold a large asset recently? Here are two taxes you should know about.

If you've sold a large asset recently, perhaps an investment portfolio, investment property or other investment, there are a couple of taxes you may not be aware of that you could be hit with.

1. Division 293 tax

The first one is something called a Division 293 tax. This tax may apply if your assessable income is more than $250,000 in a given year. If you sold a large asset that pushes your assessable income above $250,000 (even if you are eligible for the 50% Capital Gains Tax discount) and put some of the extra cash into your super, you might be up for this tax.

You see, your superannuation contributions are taxed at 15%. But if your contributions exceed the threshold – say you put an extra $20,000 into super as either salary sacrifice or a Superannuation Guarantee Contribution (SGC), you will be up for an additional 15% tax on that $20,000 ($3,000) as a result of Div 293. You could choose to pay this personally out of your pocket, or you could elect to pay for it from your Super, given that it's an extra Super tax.

The point – consider the tax implications when making additional contributions to your super in the same year you sell a large asset, as this will factor into your net benefit and essentially reduce the net benefit by 15%.

2. HECS or HELP debt

The second tax to watch out for is for people who have studied in their life and have a HECS or HELP debt (you can check yours by logging into your MyGov account).

Your HECS and HELP debt repayments are based on your accessible income – the more you earn, the greater parentage you pay back. If your assessable income increases, even as a result of selling a large asset, you will be required to pay a higher percentage of your overall accessible income towards your HECS or HELP debt (you can see rates here https://atotaxcalculator.com.au/help-debt). This could be as much as 10% of your total income for that year and mean that your tax debt is much higher than you anticipated.

Know what you're in for first

When you sell an asset, it can be tempting to put the cash to use asap. But, it is important to get proper tax advice before you do anything, so you know what you could be liable for and how you will fund it before allocating you allocate the money.