Transfer after six months
Election to have applicable fund earnings taxed within super fund
If a transfer is completed after six months of tax residency, applicable fund earnings are subject to tax. Members have the right to elect to have applicable fund earnings taxed in the super fund at the more concessional rate of 15% rather than personally at their marginal tax rate.
In the absence of an election by the individual, the applicable fund earnings will be treated as assessable income of the individual and taxed at their marginal tax rate. The election form is available at www.ato.gov.au, by entering 'NAT 11724' in the search box. The election form, if used, must accompany the contribution to the super fund.
Clients can only make the election where, immediately after the transfer, they no longer have an interest in the foreign superannuation fund. This rule means that clients who make several partial transfers from their foreign super fund instead of a single transfer (for example to avoid issues with the non-concessional cap or fund cap) will likely not be able to elect for their applicable fund earnings to be taxed within their Australian fund.
Last modified: Friday, January 12, 2018