If you want to transfer an amount from a foreign super fund to a complying Australian super fund, it may be subject to tax and other obligations in the foreign country. The amount may count towards one or both of the contribution caps and you may be asked to pay excess contributions tax.
If your fund receives a lump sum from a foreign super fund, the member may have some or all of the assessable part of the lump sum treated as assessable income of your fund. You may only transfer between a foreign super fund and an Australian super fund if you meet certain conditions.
For people aged 65 years old and above at the time of the transfer, the complying Australian super fund may only accept the contribution if the work test is met. The work test requires an individual to have worked for a minimum of 40 hours within 30 consecutive days in a financial year. Meanwhile, Australian super funds of those under 65 years old may accept the contribution even if they are not working.
The Australian super fund may not accept a transfer from a foreign fund unless the Australian tax file number or TFN has been given. You may also give your TFN within 30 days of the foreign transfer. If the Australian super fund does not have your TFN, the whole amount should be returned to the foreign fund.
If the Australian super fund receives an amount from a foreign fund which is over the fund-capped contribution limit, the excess amount has to be returned to the foreign fund within 30 days. This is to avoid exceeding the non-concessional contributions cap. The fund-capped contribution limit for those 65 years and above is the non-concessional contributions cap for the financial year while for those 64 years and below, it is three times the non-concessional contributions cap for the financial year.
Note that you may not claim a personal contribution deduction for any part of the amount transferred from a foreign fund and that your Australian super fund may not accept member contribution for people aged 75 or more.
For more information about superannuation in Australia, contact a Specialist to discuss your particular circumstances.
Chan & Naylor Group has national offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and Bankstown, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.