A technical manager has acknowledged recent action from the ATO has given an indication of the federal government’s position regarding changes to the residency rules for SMSFs.
“Anyone that looks closely on the ATO website [will have noticed in June the regulator] released a tax ruling about individuals and their residency status, so we’re starting to see the wheels be put in motion for changes around the whole concept of residency [regarding SMSFs],” Smarter SMSF education and technical manager Tim Miller said.
However, Miller suggested practitioners should not expect any changes to the rules over the next 12 months as no formal steps have been initiated for a formal change to them.
To this end, he pointed out no legislation had been enacted for SMSFs and the definition of an Australian superannuation fund in the 2023 financial year, meaning any changes will not come into effect until the 2025 income year.
“This measure will not come in until 1 July following royal assent, which means not until 1 July 2024 [at the earliest],” he noted.
As such, he took the opportunity to point out the compliance obligations advisers need to ensure their clients, who are currently overseas, satisfy when they are looking to make contributions to their SMSFs.
“If you’ve got clients overseas and they are looking to contribute to their self-managed super fund, you’ve got to [administer the 50 per cent test] of all active members and make sure there are enough resident members [with sufficient balances and who are able] to offset anyone who is [outside of Australia],” he noted.
He said if this condition is not met, the individuals who are currently overseas will have to make contributions to an alternative fund.
The Morrison coalition government announced the proposed changes to the superannuation residency rules in the May 2021 budget.
''