Edited version of your private ruling

Authorisation Number: 1012554036883

Ruling

Subject: Roll over of an overseas pension

Question

1. Are you able to roll-over an overseas pension to an Australian superannuation fund?

2. If you commute your overseas pension to a lump sum are you able to contribute this amount to an Australian superannuation fund?

Advice/Answer

1. No.

2. The Commissioner is unable to rule as this is not in respect of an income tax law.

This review applies for the following period

Year ended 30 June 2014

The scheme commences on

1 July 2013

Relevant facts and circumstances

You are the member and Trustee of a self-managed superannuation fund (the Fund).

In the late 1940s, you commenced membership with an overseas fund.

In the early 1970s, you became an Australian resident for tax purposes.

In the 1999-2000 income year, you commenced to receive a pension from the overseas fund.

In the 2004-05 income year, you received binding advice regarding your overseas pension and how to calculate the undeducted purchase price.

You have advised that in the event of your death the overseas pension reverts back to your spouse and child.

You are over the age of 75 years.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 306-10.

Income Tax Assessment Act 1997 Paragraph 306-10(c).

Superannuation Industry (Supervision) Regulations 1994 Subregulation 1.03(1).

Superannuation Industry (Supervision) Regulations 1994 Subregulation 7.04(1).

Superannuation Industry (Supervision) Regulations 1994 Subregulation 7.04(2).

Superannuation Industry (Supervision) Regulations 1994 Subregulation 7.04(3).

Superannuation Industry (Supervision) Regulations 1994 Subregulation 7.04(4).

Superannuation Industry (Supervision) Regulations 1994 Subregulation 7.04(4).

Taxation Administration Act 1953 Division 359 of Schedule 1.

Taxation Administration Act 1953 Subsection 359-5(1).

Question 1

Summary

As the overseas pension provider is neither a complying superannuation fund established in Australia nor an Australian life company or registered organization, any benefits paid from the overseas pension provider cannot be rolled-over to the Australian superannuation fund.

Detailed reasoning

In order for an amount to be rolled over into an Australian superannuation fund it must be a 'roll-over superannuation benefit'. A roll-over superannuation benefit is defined in section 306-10 of the Income Tax Assessment Act 1997 (ITAA 1997) as follows:

A *superannuation benefit is a roll-over superannuation benefit if:

(a) the benefit is a *superannuation lump sum and a *superannuation member benefit; and

(b) the benefit is not a superannuation benefit of a kind specified in the regulations; and

(c) the benefit satisfies any of the following conditions:

(i) it is paid from a *complying superannuation plan;

(ii) it is an *unclaimed money payment;

(iii) it arises from the commutation of a *superannuation annuity; and

(d) the benefit satisfies any of the following conditions:

(i) it is paid to a complying superannuation plan;

(ii) it is paid to an entity to purchase a superannuation annuity from the entity.

Paragraph 306-10(c) of the ITAA 1997 requires that to be a roll-over superannuation benefit, the benefit must be either paid from a complying superannuation plan, an unclaimed money payment or arise from the commutation of superannuation annuity. It is clear that the proposed transaction would not represent an unclaimed money payment. Therefore, in order for a valid roll-over to take place the benefit to be rolled over must be either paid from a complying superannuation plan or arise from the commutation of a superannuation annuity.

In the present case the benefit proposed to be rolled over to the Australian superannuation fund comes from a pension provider established in an overseas country. As such the benefit would be neither paid from a complying superannuation plan or arise from the commutation of a superannuation annuity. This is because the transactions require that:

(a) the paying entity be a superannuation fund established in Australia (and determined to be compliant with the relevant provisions of the Superannuation Industry (Supervision) Act 1993); or

(b) the annuity be a superannuation annuity as defined under the Income Tax Assessment Regulations 1997 (that is, an annuity provided by an Australian life company or registered organization).

As the overseas pension provider is neither a complying superannuation fund established in Australia nor an Australian life company or registered organization, any benefits paid from the overseas pension provider cannot be rolled-over to the Australian superannuation fund.

Question 2:

The Commissioner can only provide a private ruling in response to a valid application. For the following reason we will not be making your private ruling in respect of this issue raised in your application.

Division 359 of Schedule 1 to the Taxation Administration Act 1953 (TAA) provides that a private ruling is a written statement of the Commissioner's opinion of how a relevant provision applies, or would apply, to a particular entity in relation to a specified scheme.

Provisions that are relevant for rulings are provisions about certain laws administered by the Commissioner. These provisions are the following:

(a) income tax

(b) medicare levy

(c) fringe benefits tax

(d) franking tax

(e) withholding tax

(f) mining withholding tax

(g) the administration or collection of those taxes

(h) a grant or benefit mentioned in section 8 of the Product Grants and Benefits Administration Act 2000, or the administration or payment of such a grant or benefit.

In this case, your request is whether you can commute your benefits in the overseas fund and contribute the proceeds to an Australian superannuation fund.

The issue of whether a regulated superannuation fund is able to accept contributions is determined under the Superannuation Industry (Supervision) Act 1993 (SISA) and the Superannuation Industry (Supervision) Regulations 1994 (SISR).

These are not a relevant provision for the purposes of the TAA.

Consequently, in accordance with subsection 359-5(1) of the TAA the Commissioner can not provide a private ruling on the issue raised. However general advice will be provided.