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Re: Withdrawing Super for non-resident & non-citizen & non temporary resident

Newbie

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My father has never lived in Australia, and he is a Singaporean citizen. However he was a director of a listed Australian company for a number of years and was paid directors fees for his work in relation to the company, e.g. attending board meetings in Australia etc. This company also paid superannuation for him into a superfund 

 

He always visited Australia on business tourist visas and was never a "temporary resident" as I understand it. His trips were never more than 2 weeks at a time and maybe 1-2 trips a year at most.


He is no longer a director at that company and no longer has any income in Australia. He has met one of the criteria for releasing his super (lost a gainful employment) and would like to access his super.

 

His super fund is telling him that he needs to withdraw it under a DASP but I don't think this is correct? I am looking for some help and guidance on this and whether his super release will be taxed or not (whether he takes it now or when he turns 65 in 3 years time).

 

I have tried to read up multiple sources for this but as far as I can tell this situation is a bit unique, or maybe I am misunderstanding it. Please help me out! Thank you so much and really appreciate the help.

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ATO Community Support

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Hi @Ahmee89,

 

Your thinking is correct that your father won't be eligible for DASP. If your father did not work and earn the super while in Australia on the visa (which is a condition of the Business Visitor visa), he cannot be eligible for a DASP.

 

A loss of gainful employment is not a condition for release of super. Your father has reached preservation age, though, so can access his super if he is now retired. He'll be able to access the super as any other retiree does.

 

You can read the eligibility for DASP and conditions of release of super on our website.

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Most helpful response

ATO Community Support

Replies 4

Hi @Ahmee89,

 

Your thinking is correct that your father won't be eligible for DASP. If your father did not work and earn the super while in Australia on the visa (which is a condition of the Business Visitor visa), he cannot be eligible for a DASP.

 

A loss of gainful employment is not a condition for release of super. Your father has reached preservation age, though, so can access his super if he is now retired. He'll be able to access the super as any other retiree does.

 

You can read the eligibility for DASP and conditions of release of super on our website.

Newbie

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Thank you very much @BlakeATO for your quick reply!

 

According to this link , if you are over 60 and have ceased an employment arrangment, this is a condition for release of super, is this correct?

 

Community Moderator

Replies 2

Hi @Ahmee89

 

Both you and @BlakeATO are correct. While a loss of gainful employment isn't a condition of release, retirement is. As your father is 60 or more, they are considered retired when they leave a job.

Newbie

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@BlakeATO @ChrisATO 

 

Thank you so much for your responses. Sorry for seeking further clarification, I just don't want to do the wrong thing here. I've just gotten a bit more information and wanted to check if this is correct or not.

 

My Father had a subclass-456 visa which has now expired. He technically never lived in Australia and would just fly in to Australia for board meetings, site visits etc for a week or so at a time, staying in hotels. He was paid a director's fee for this and they also paid him superannuation. He would have been paying tax on his australian income as a non-resident at that time. Is this still considered as a "temporary resident"?

 

The main question I want to understand is, if he waits till he is 65 years old, can he take out the super in one-lump sum without any 35% withholding tax deducted from his superannuation balance? I note that he does not live in Australia.

 

thank you again.

 

 

ATO Certified Response

ATO Community Support

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Hi Ahmee89,

 

Super lump sum payments paid to a non-resident (not including former temporary residents) are subject to the same tax rates as payments made to residents.

 

The super tax rate depends on the taxable components, he can contact his super fund to find out. The taxed element is no longer reportable once an individual turns 60. The untaxed element is reportable as tax has never been applied, a tax offset can be claimed when lodging the return. Tax free component is exactly that, no tax applicable. 

 

The super payment is Australian sourced income. If your dad lives in a country that has a double tax agreement with Australia there may be no Australian tax imposed. Your dad needs to check the tax laws whether a double tax agreement exists between Australia and the country in which he resides or is a tax resident. 

 

Links -

Super and tax.

International Tax Agreements.

 

All the best.