Whether you are planning on a permanent move to Switzerland, elsewhere overseas, or looking to return to Australia, there are some important things to consider when it comes to contributing to your Superannuation (Super) Fund.
It may be surprising to learn that despite non-residency status, there remains eligibility to make contributions to a Super Fund in Australia.
Initially, working out if Australian residency for tax purposes applies to you is vital, as this would determine the best approach for your personal finances.
Contributing to your Super could be a particularly good option to maximise your tax efficiency if your objective is to eventually retire in Australia, or if the taxation on your Super is more attractive in your planned final country of residence. If you are thinking about maintaining your Super as a non-resident of Australia, the considerations below are key factors of which to be aware.
Contributing to your Super as a Non-Resident of Australia
The rules regarding eligibility for Super contributions apply equally between residents, non-residents and temporary residents. Although some Super Funds can require Australian residency, in these cases you may be able to rollover (transfer) your Super into a different fund that accepts non-residents.
The standard contribution caps and rules apply universally, with the exception of certain co-contributions and concessions that may not be available, or applicable, for non-residents. Additionally, it is potentially detrimental to make contributions to a Self-Managed Super Fund as they require annual residency tests and will therefore require the investor to take prior professional advice.
Foreign employment income is not taken into consideration when working out the tax concessions for personal Super contributions. However, for those with sufficient Australian sourced assessable income, you may be entitled to claim a tax deduction against that income for your personal contribution.
Accessing your Super
In most cases, non-residents and residents are subject to the same rules when accessing their Australian Super. This means you will typically be unable to access your Super until you meet the conditions of release, which will vary between the ages of 55 to 65, depending on the year you were born and your Australian employment status.
If your ultimate goal is to retire in Australia as a tax resident, the tax rate in the pension income withdrawal phase on a Super Fund converted into a pension will be nil. As such, continuing to make contributions whilst living and working overseas could well be a viable option in order to maximise your retirement fund.
Alternatively, if your plans are to remain overseas for retirement, it is essential to note that your Super may be subject to tax in the receiving country. This will be dependent on any relevant double tax agreements between Australia and the country you will ultimately reside in.
Whether you are considering returning home or remaining overseas, it is essential to seek professional advice from one of our specialist advisers to ensure you make the most of your Super in accordance with your individual tax position.
Tax-Efficiency and Flexibility
Due to the generous tax-efficiencies, contributing to your Super in Australia can be in your interests when in Switzerland. We help you to create a retirement strategy that includes and accounts for your Super Fund, Swiss Pillar 2 and 3 pension funds and other tax-efficient options. In this way, such strategies facilitate a great degree of flexibility down the line, regardless of where you ultimately retire.
For this, specialist advice that takes account of your personal circumstances is vitally important.
How we can help
Navigating the complexities of Super contributions as a non-resident can often present unnecessary difficulties without proper guidance. We are here to guide you through the process and make it as smooth as possible.
There are also additional opportunities available to non-residents planning to return to Australia to achieve even greater tax efficiency. To find out how to take advantage of the suite of options open to you, get in touch today and book a no-cost and no obligation call or meeting with our specialist Australian Advisers now.
Send us an email to email@example.com or complete our Contact Form here.
Please note that all information within this article has been prepared for informational purposes only. Blackden Financial are not tax advisers and, as such, this article does not constitute legal or tax advice. Always ensure you speak to a regulated financial adviser and tax adviser before making any financial decisions.