Write at T the amount that is to be included in the fund's assessable income as a result of a change in tax status of the fund. A fund that changes from complying to non-complying (formula A), or a fund that was not an Australian superannuation fund but becomes an Australian superannuation fund (formula B), must calculate the amount of ordinary income and statutory income from previous years and include these amounts in the assessable income of the fund in the year the status of the fund changed.
A change in compliance or residency status for a fund may result in changes in tax rates.
Formula A - Previously complying fund
If a fund changes from being a complying superannuation fund to a non-complying superannuation fund, the fund's assessable income in the year in which its status changed will include its ordinary income and statutory income from previous years as calculated using the formula below. As a result, the tax concessions applicable to the fund when it was a complying fund are effectively recouped.
Formula A is:
Asset value − non-concessional contributions = assessable amount
where:
- asset value is the sum of the market value of the fund's assets immediately before the start of the current income year, and
- non-concessional contributions (formerly referred to as 'undeducted contributions') are the total of
- the part of the crystallised undeducted contributions that relate to the period after 30 June 1983, and
- the contributions segment for current members that have not been, and cannot be, deducted.
The amount calculated in formula A is included in the fund's assessable income for the year the fund becomes a non-complying fund, and is taxed at the rate of 45%.
Formula B - Previously foreign fund
If a foreign superannuation fund becomes an Australian superannuation fund, its assessable income in the year it changes its status will include the amount calculated using the formula below:
Formula B is:
Asset value − member contributions = assessable amount
where:
- asset value is the sum of the market values of the fund's assets immediately before the start of the current income year, and
- member contributions in formula B is the total amount of current member contributions in the fund at the time.
The amount calculated, is included in the fund's assessable income for the year in which the fund changes its status from foreign superannuation fund to a complying Australian superannuation fund. The amount is taxed at the rate of 15%. If the fund changes its status from a foreign superannuation fund to a non-complying Australian superannuation fund, the amount is taxed at the rate of 45%.
The fund is not entitled to a tax offset for the foreign income tax that was paid in the previous year where:
- a previously complying fund or a previously foreign fund includes an amount in assessable income under either formula A or formula B above, and
- the trustee of the fund paid foreign income tax in respect of that amount before the start of the income year.