Travelling overseas for an extended period is an exciting adventure. What isn’t so exciting is the prospect of breaking compliance law's relating to your SMSF while enjoying your trip.
There are specific conditions that must be met to deem the self-managed super fund ATO compliant. They are as follows:
The SMSF will be recognised as an Australian super fund provided that the setup of and initial contributions have been made and accepted by the trustee(s) in Australia or at least one of its assets are located in Australia.
The central management and control of the fund must ordinarily be in Australia. This means the SMSF’s strategic decisions are regularly made, and high-level duties and activities are performed in Australia. Some examples include formulating the investment strategy, reviewing the performance of the fund’s investments and determining how assets are to be used for member benefits.
Generally, a fund will meet this condition even if its central management and control is temporarily outside Australia for up to two years. If central management and control of the fund is permanently outside Australia for any period, it will not meet this requirement
An “active member” is a contributor to the fund or contributions to the fund have been made on their behalf.
To satisfy the “active member test” trustees should ensure the fund has no inactive members, or that it has active members who are Australian residents and who hold at least 50 per cent of the total market value of the fund’s assets attributable super interests, or the sum of the amounts that would be payable to active members if they decided to leave the fund.
If a member of the fund becomes a nonresident but still wishes to make or receive contributions, they should do this outside of their SMSF, i.e., through a retail or industry super fund. When they return as an Australian resident, they can then rollover the contributions to their SMSF.