I'm an Australian citizen, living in Japan for the last 20 years.
I reach my preservation age next year and plan to withdrawn my super as a lump sum.
I'm non-resident for tax purposes in Australia and a taxpayer in Japan.
My Japanese tax guy says that Japan will tax my super lump sum as income at about 15%.
My Super fund told me that the ATO will also charge Capital Gains Tax at "the usual 15%" since I still hold an Australian passport meaning the rules about being non-resident for tax purposes do not apply.
I saw an answer to another community question saying that if the overseas country (Japan) has a tax treaty with Australia then double taxation may not apply so would I, as a non-resident for tax purposes living in Japan, still be charged 15% CGT by the ATO?
Maybe I just need to pay it to the ATO and try to claim an allowance from the Japanese tax office but it doesn't seem right that both countries will tax me at 15%.
I understand you can't comment on what the Japanese tax office will do, just asking what to expect from the ATO.
I haven't needed to lodge a tax return since 2017/18 but have filed a non-lodgement advice every year since 2019.
Thank you.
39 views
2 replies
Most helpful replyATO Certified Response
Author: RachelATO(Community Moderator)Community Moderator ATO Certified Response20 Apr 2026
Hi @BDL4685,
CGT doesn't apply to super benefits. Your super fund has provided incorrect information about CGT applying to your super withdrawal.
Australian super lump sums paid from a taxed Australian super fund to a member aged 60 or over are non-assessable, non-exempt income. This treatment applies regardless of whether you're an Australian tax resident or non-resident. If you're over the preservation age and receiving a lump sum from a taxed Australian super fund, Australia will tax the lump sum at $0.
Your Australian citizenship or passport status is irrelevant to the taxation of super benefits. Only your age, the type of fund, and the benefit components matter for determining the tax treatment.
Because Australia imposes no tax on your super lump sum, there will be:
- no Australian tax liability
- no PAYG withholding
- no requirement to lodge an Australian tax return solely because of the withdrawal.
The Australia–Japan tax treaty doesn't create Australian taxing rights over your super. Because Australia imposes no tax, there's no need for foreign tax credit calculations.
You should contact your super fund to clarify the correct tax treatment of your withdrawal. The information provided to you about CGT and passport status affecting your super taxation is not consistent with Australian tax law.
Thanks very much Rachel, I'll get back to them.
