SMSF Residency Rules Guide Available Online
Superannuation fund is an excellent way to save for your retirement, however you need to know all the rules associated with it before the final set up. The basic rules to set up a superannuation fund, is to be an Australian resident and to establish the fund in Australia. Since most people are not quite familiar with SMSF residency rules, it is important to carefully read the rules by contacting the Australian Taxation Office (ATO) or rely on a professional who will help you prepare all the needed documents.
As a trustee of your SMSF, you need to be aware of all regulations and laws, so take the time to get familiar with the smsf residency rules to ensure your SMSF is always in compliance with ATO. According to the smsf residency rules, you are able to manage your fund even when not in the country, however for certain period of time only. Here are few more important smsf residency rules you should know before setting up your SMSF.
- If you fail to follow the smsf residency rules, you will be taxed at the higher rate of 46.5 % rather the regular rate of 15 %.
- If you plan to stay or move overseas, then keep in mind that the ATO allows the trustee to be absent for no more than 2 years. This is one of the smsf residency rules that you must follow if you want to ensure your smsf is in compliance.
- According to the smsf residency rules, a trustee that lives or stays overseas for longer period of time, can return to Australia for 28 days in order to restart the 2 years period.
- Before you set your own fund, you need to know that one of the criteria for setting an Australian smsf is to control the fund in Australia, or at least have 50% of the smsf membership present in Australia. However, the smsf residency rules state that the trust deed may not be signed and executed in Australia.
- If the smsf trustee plans to be absent for more than 2 years, then that same person is allowed to convert the smsf to a small ARPA superannuation fund managed by a professional or roll the entitlements from an smsf into a retail or industry fund.