If you are a non-resident for tax purposes and live overseas, can you still keep your superannuation which is in full pension phrase currently?
A: Thanks for the question.
Theoretically yes, but your SMSF needs to remain “an Australian super fund”. If it doesn’t, the tax consequences of being a non-complying fund are pretty horrific.
There are 3 tests it needs to satisfy:
“An SMSF is an Australian super fund if it meets all three of these residency conditions.
- The fund was established in Australia, or at least one of its assets is located in Australia.
- The fund was ‘established in Australia’ if the initial contribution to establish the fund was paid and accepted in Australia.
- The central management and control of the fund is ordinarily in Australia.
- This means the SMSF’s strategic decisions are regularly made, and high-level duties and activities are performed, in Australia. It includes formulating the investment strategy of the fund; reviewing the performance of the fund’s investments; formulating a strategy for the prudential management of any reserves; and determining how assets are to be used for member benefits.
- In general, your fund will still meet this requirement even if its central management and control is temporarily outside Australia for up to two years. If central management and control of the fund is permanently outside Australia for any period, it will not meet this requirement.
- The fund either has no active members or it has active members who are Australian residents and who hold at least 50% of:
- the total market value of the fund’s assets attributable to super interests, or
- the sum of the amounts that would be payable to active members if they decided to leave the fund.
For the purposes of condition three, a member is an ‘active member’ if they are a contributor to the fund or contributions to the fund have been made on their behalf.”
This can be a very complex part of the law, so you may wish to access professional advice.
