Situation
I am 65 years old and became a resident of Australia for tax purposes in 2004. Before coming to Australia I opened 2 superannuation accounts with the National Provident Fund (NPF). These accounts are pre-KiwiSaver. I now want to move the balance of the accounts to Australia and add it to my Australian Superannuation Fund
NPF is not a KiwiSaver scheme and thus does not fall under the Trans-Tasman Portability scheme that was put in place in 2009. So this moves to my first question:
The Scheme is a Superannuation Scheme registered under the Financial Markets Conduct Act 2013 (NZ). The Scheme is governed by a Trust Deed dated 28 March 1991 which has been amended from time to time and was last amended and restated on 20 October 2016.
Question 1
Does the NPF qualify as a ‘superannuation fund’ or a relevant ‘scheme’ within the meaning of Australia’s superannuation law?
Balance Movement
As stated, I intend to move the balance from NZ to Australia. However, NPF have advised that they cannot transfer funds from their accounts to another super fund (in my case a complying Australian superannuation fund). So this leaves me with 1 option and that is to receive a lump sum payment that is tax-free in NZ. Based on dates and account balances I can determine the assessable fund earnings (AFE) under s 305-70(3) of the ITAA 1997.
This is where it gets annoying
I have an opinion (from an accounting firm) that says I can receive the lump sum amount into my Australian Bank account and then transfer it to my Super Fund. I can choose to have the assessable amount (AFE) treated as assessable income of the Australian super fund (by doing so, the Australian super fund applies/pays the concessional fund tax rate of 15% on the assessable part of the lump sum).
My Super Fund says this is not possible. The super lump sum is transferred from a foreign fund directly to an individual. The AFE of the payment is included in the individual's assessable income and taxed at their marginal rate.
My interpretation is that this is not a transfer that is directly to an Australian super fund but directly to an individual so the assessable amount of the payment is included in my assessable income and taxed at my marginal rate.
Question 2
Is my interpretation (and the Super Funds) correct?
Question 3
If NPF does not qualify as a ‘superannuation fund’ or a relevant ‘scheme’ within the meaning of Australia’s superannuation law, then does the AFE calculation apply and the full lump sum is included in the assessable income?
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