Self Managed Super Fund

If you work overseas for more than 2 years with the intention of staying longer your SMSF may lose its concessional tax status.

Many executives receive a transfer or a posting overseas. In many cases they are not clear on how long the posting will last. They are happy with the transfer or promotion, it is a great opportunity and adventure but they are unclear how it will work out.

If you are in this situation and you have a Self Managed Superannuation Fund (SMSF), be careful that it does not lose its Australian tax concessions.

That is, to remain a resident SMSF and the earnings of the fund tax at 15%, rather than being deemed a non-resident fund and the earning tax at 45%, the SMSF must satisfy two tests.

  1. The first test involves the place of Central Management and Control (CMC). This test generally looks at where the key important strategic investment decisions are made, here in Australia, or overseas. If the trustees of the SMSF are you and your wife and both you and your wife relocate overseas, it would be difficult to argue that the place of Central Management and Control is in Australia.

If you argue that your absence from Australia is temporary and less than two years it is possible to argue that your SMSF retains its residency status, and the earnings are taxed at 15%.

  1. The second test relates to the members of the fund. To retain a residency status, to ensure the SMSF remains a Concessionally Taxed Resident fund, the fund should only receive contributions from members who are residents of Australia.

Therefore, if the SMSF only has two members, mum and dad, and both have relocated overseas for an extended period of time a contribution to the SMSF by either mum or dad may render the SMSF to lose its Australian residency status.


If you have concerns about the residency status of your SMSF please feel free to contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.

The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.  It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.