A recent private binding ruling (PBR) has shed some light on an area of confusion in the SMSF sector regarding the SMSF residency rules.
A PBR released last week asked the question: Does the fact that an Australian superannuation fund pays a pension to a non-resident member jeopardise the fund’s residency status?
The ruling confirms that as long as three “important” tests are met, the fund will remain an Australian superannuation fund and will not lose that status just because it pays a pension to a non-resident member, said principal of Townsends Business & Corporate Lawyers, Peter Townsend.
The tests are that the fund was set up in Australia or has Australian assets; the fund’s central management and control are in Australia; and the fund passes the so-called 'active member' test.
Speaking to SMSF Adviser, Mr Townsend said the residency rules are a persistent area of confusion in the SMSF industry.
“This PBR is really just guidance as to how the ATO thinks, it’s only binding on them as far as this particular incidence is concerned. However, we do look at these things as a methodology for seeing how the tax office is thinking about these sort of issues,” Mr Townsend added.
For more from Peter Townsend on complying with the residency rules, see his blog ‘Residency and SMSFs: the key compliance tests’
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 21 Aug 2016Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 21 Aug 2016Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- view all