Tax treatment of transfers from foreign super funds
Conditions
Certain conditions must be met before your complying Australian super fund can accept a transfer from your foreign super fund.
A transfer from your foreign super fund is a member contribution.
Age limits
If you are aged 65 or more at the time of the transfer, your Australian super fund can only accept the contribution if you meet the work test.
The 'work test' requires a person to have worked at least 40 hours within 30 consecutive days in a financial year. People who are aged between 65 and 74 must meet the work test to be allowed to make personal superannuation contributions.
If you are under 65 at the time of the transfer, your Australian super fund can accept the contribution even if you are not working.
Your Australian super fund cannot accept a member contribution for you if you are aged 75 or more.
Tax file number
Your Australian super fund cannot accept a transfer from your foreign fund unless:
you have given your Australian super fund your tax file number, or
you give your tax file number to your Australian super fund within 30 days of making the foreign transfer.
If your Australian super fund does not have your tax file number they must return the whole amount to your foreign fund.
Fund-capped contribution limit
If your Australian super fund receives a transfer from your foreign fund which is more than your fund-capped contribution limit, it must return to the foreign fund the amount which is over your fund-capped contribution limit within 30 days.
This rule is designed to prevent you from inadvertently exceeding your non-concessional contributions cap.
You cannot claim a personal superannuation deduction for any part of the transfer from the foreign fund.
Your fund-capped contribution limit for a financial year depends on your age on 1 July of the financial year.
If, on 1 July of the financial year, you are:
65 years of age or older, your fund-capped contribution limit is the non-concessional contributions cap for that financial year
64 years of age or less, your fund-capped contribution limit is three times the non-concessional contributions cap for that financial year.
Santiago is 68 and transfers his super interest of $A198,000 from Argentina to Australia in 2008–09.
Santiago was unaware that the contribution would count towards his non-concessional contributions cap. He meets the work test and has given his fund his tax file number. However, as he is older than 65, his fund-capped contribution limit is only $150,000. His Australian super fund must return the excess $A48,000 to his super fund in Argentina. Santiago waits until the next financial year to transfer the excess $48,000 to his Australian super fund so that he doesn’t exceed his non-concessional contributions cap.
Sections within Transferring amounts to a complying Australian super fund
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