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Re: Superannuation Payout when Australian Citizen but Permanent Resident overseas

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Newbie

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I hold Canadian PR status and have been living and working in Canada for the past 8 years.  I continue to work full-time. 

I am 60 years old and wish to withdraw a lump sum of my Australian super to help my children out on a new venture. 

My tax free portion is very minimal.  Will I be paying something like 17% tax back to ATO when I declare this in my global income for this year? Or  how does that work.?  I do my tax return obviously through the Canadian system just adding about $15,000 AUD  income that I receive each year from  taxable investments in  Australia.

 

Thanks for any clarity you have to offer.

 

 

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Devotee

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As you are a citizen, you are required to meet the standard conditions of release such as retirement or reaching age 65 to access super as lump sums. You can find out more on here: https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/#Ceasing.... Living and working in Canada for the past 8 years means that you are likely treated as a non-resident for Australia tax purposes, but this does not impact your ability to withdraw super, so long as you can satisfy a condition of release.

 

Under Australian tax law (specifically the Income Tax Assessment Act 1997), any lump sums paid out of a member's superannuation after 60 is non-assessable non-exempt income. In other word, it's tax free. You won't need to pay a cent of tax on superannaution lump sums as long as it does not contain an 'untaxed element'. To find out what components and elements your super comprises of, you should contact your superfund for clarification. Commonly, retail as well as industry superfunds do not have this element, and hence, superannuation paid out of these funds after the age 60 is generally tax free.

 

Note, it would be prudent to confirm with a foreign tax specialist as to whether tax would be levied by the resident country on the lump sum. Unfortunately i am not an international tax specialist so can't give you further advice, although i wish i was.

 

 

 

 

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Devotee

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As you are a citizen, you are required to meet the standard conditions of release such as retirement or reaching age 65 to access super as lump sums. You can find out more on here: https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/#Ceasing.... Living and working in Canada for the past 8 years means that you are likely treated as a non-resident for Australia tax purposes, but this does not impact your ability to withdraw super, so long as you can satisfy a condition of release.

 

Under Australian tax law (specifically the Income Tax Assessment Act 1997), any lump sums paid out of a member's superannuation after 60 is non-assessable non-exempt income. In other word, it's tax free. You won't need to pay a cent of tax on superannaution lump sums as long as it does not contain an 'untaxed element'. To find out what components and elements your super comprises of, you should contact your superfund for clarification. Commonly, retail as well as industry superfunds do not have this element, and hence, superannuation paid out of these funds after the age 60 is generally tax free.

 

Note, it would be prudent to confirm with a foreign tax specialist as to whether tax would be levied by the resident country on the lump sum. Unfortunately i am not an international tax specialist so can't give you further advice, although i wish i was.

 

 

 

 

Newbie

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Thank you so much for such an in-depth reply. We do not meet the criteria to take the super so we will keep it there for the time being and keep working here in Canada. Once we retire we can get it Smiley Happy
Thanks again for the response
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