When you transfer an amount from your foreign super fund to your Australian super fund, your fund will report the transfer as a contribution for you for the year.
We use the contributions your fund reports to work out your concessional and non-concessional contributions for the year.
How your fund reports a foreign fund transfer
Your fund must include the transfer in the contributions it reports for you.
Your fund will report the transfer at the:
- Non-assessable foreign fund amount label, and/or
- Assessable foreign fund amount label.
If you elect to include some of your applicable fund earnings in your fund’s assessable income, the amount you elect will not be reported at either of these labels. It will be reported as part of your total contributions.
Non-assessable foreign fund amount
Generally, most of a transfer from a foreign fund will consist of an amount which the fund does not include in its assessable income (unless you make an election). This amount will generally consist of contributions you have made to the foreign fund and the earnings on those contributions.
The non-assessable amount is the amount of the transfer which was ‘vested’ in you at the time of the transfer. Vested means that you were entitled to it – it had to be paid to you at law if you met any other necessary conditions.
Fund earnings will generally have been vested in you at the time of the transfer even if they weren't allocated to your account until the time of the transfer.
The non-assessable foreign fund amount your fund reports will include any applicable fund earnings unless you have made an election to include all or part of the applicable fund earnings in your fund’s assessable income.
If you elect to include some or all of your applicable fund earnings in the assessable income of your fund, your fund will not report at this label the amount you elect, even though it is now included in the fund’s assessable income. The amount is no longer treated as a contribution but treated like normal earnings of your fund.
The amount reported at the Non-assessable foreign fund amount label is counted towards your non-concessional contributions.
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The applicable fund earnings are personally assessable to you unless you make the election to include the amount in your fund’s assessable income.
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Assessable foreign fund amount
Any amount of a foreign fund transfer that exceeds the amount that was vested in you at the time of transfer is included in the assessable income of the fund.
The amount reported at the Assessable foreign fund amount label is counted towards your concessional contributions.
Example 5
When John arranged for a transfer from his foreign super fund to his Australian super fund, his account balance was $A300,000. However, his foreign employer allocated an additional $75,000 to John as a discretionary payment in recognition of his years of service. The additional $75,000 is the assessable component of the total transfer amount of $375,000.
Example 6
When Guy arranged for a transfer from his foreign fund to his Australian super fund, his account balance was $200,000. However, as part of finalising Guy’s account, his foreign fund credited $15,000 in earnings to his balance. Normally, this would not have been done until the end of the calendar year. However, under the rules of the foreign fund, earnings must be credited to an account prior to its closure. In this example, the earnings were vested in Guy, even though they would not have been credited to his account until later in the year if he had not requested the transfer.
Sections within Transferring amounts to a complying Australian super fund
Last Modified: Wednesday, 17 June 2009
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