Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon John Dawkins, M.P.)Exemption for Foreign Employer-Sponsored Superannuation
Overview
This chapter explains the exemption that is available from the Foreign Investment Fund ( FIF) measures where a resident natural person has an interest in a foreign employer-sponsored superannuation fund.
Explanation
The foreign employer-sponsored superannuation exemption is available to a taxpayer that is a natural person who, at the end of the notional accounting period of the FIF, had an interest in a FIF that is an employer-sponsored superannuation fund. The FIF must be a superannuation fund maintained by an employer, or the employer's associate, for the benefit of the employees of that employer. The taxpayer should be an employee or former employee of the employer. [Subsection 519(1)]
The term 'employee' includes a director of a company. [Subsection 519(2)]
Meaning of 'associate of employer'
The definition of 'associate' in section 318 applies except where it is modified for the purposes of the FIF measures. [Section 491]
Broadly, for the purposes of the foreign employer sponsored superannuation exemption, the following are considered associates of an employer who is a natural person:
- relative;
- partnership in which the employer is a partner;
- trustee of a trust if the employer benefits under the trust; and
- company, if:
- he company is sufficiently influenced by the employer; or
- majority voting interest in the company is held by the employer.
If the employer is a company, other than in the capacity of a trustee, its associates include:
- ntities that would be treated as associates of the company under any of the dot points relating to natural persons; and
- ny 'controlling entity'.
A company has a 'controlling entity' if:
- he company is sufficiently influenced by that entity, either alone or together with other entities; or
- majority voting interest in the company is held by that entity.
The associates of a trustee are any entities that benefit under the trust. The term trust in this context does not include a public unit trust or an eligible Part IX superannuation fund.
The associates of a partnership are the partners in the partnership. [Subsection 491]