Can I move overseas and keep my self managed super fund?

Change of plans? A move overseas may be around the corner! But what does that mean for your Self-Managed Super Fund (SMSF)?

You must ensure your SMSF retains its status of an Australian Super Fund to avoid substantial penalties. To do this, there are three residency conditions to meet:

  1. The fund was established in Australia or at least one of its assets is located in Australia.
  2. The central management and control of the fund is ordinarily in Australia.
    • This requires the decision making, high level duties and activities to be performed in Australia, for example making investments and reviewing performance.
    • Generally, your fund will meet this requirement if the absence is intended to be temporary (defined as not more than two year) even if the central management of the fund is temporarily outside of Australia.
  3. The fund must either have no active members (i.e. no one making contributions or rollovers into the fund), or alternatively at least 50% of the assets must be owned by active members that reside in Australia.

Failure to meet these conditions may result in being classified as a non-complying fund, which can consequently result in the whole of the SMSF assets being taxed at 45%.

Pro tips:

  • Plan ahead if you are moving overseas to avoid significant penalties. Options include move your SMSF investments to an industry super fund, appointing further trustees such as adult children or advisors.
  • Consider suspending contributions to your fund while you are overseas. Contributions can be made into an alternate fund during this period an then rolled into the SMSF upon your return.

Follow this link for a checklist.

https://www.ato.gov.au/Super/Self-managed-super-funds/Setting-up/Check-your-fund-is-an-Australian-super-fund/

Other related blogs:

TBAR – what it means for an SMSF trustee
You need to act soon with collectables in your super fund
Access super before retirement

Author: Lachlan Hunn
Email: lachlan@faj.com.au