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Non-resident withdrawing lump sum from Super at Preservation Age

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Newbie

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Hi,

I am a non-resident Australian citizen with an Australian Super Fund accumulated when living and working in Australia. I have just reached my Preservation Age and meet the ATO criteria for a tax free withdrawal.

 

1) Do the same tax rules apply to me as if I was a resident?

 

2) Will my Super Fund try and apply a WHT?

 

Thank you.

 

PS I just found this community - it’s fantastic,  don’t know how long it has been going but wish I had known before!

 

1 ACCEPTED SOLUTION

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Devotee

Replies 0

Hi @AKGAZCA

 

A tax free withdrawal applies from age 60, not from reaching your preservation age.

 

Here's a link to information on ato.gov.au for super funds on the tax to withhold from lump sum payments.

 

The amounts withheld by super funds for non-residents depend on if there's a tax treaty in place between Australia and the person's country of residence. Basically, if the amount will be taxed overseas it won't be taxed in Australia. If it won't be taxed overseas the Australian tax treatment will apply.

 

So, if there's no tax treaty in place, or the tax treaty doesn't cause the super payment to only be taxed in the other country, and your super is being paid before age 60, then the answers are that your super will be taxed in the same way as if you were an Australian resident (except the medicare levy of 2% won't be withheld for a payment to a non-resident) and that the fund will withhold tax from the payment.

 

And again, if the payment will be taxed according to Australian tax rules rather than in your country of residence there's likely to be no tax payable if you wait until age 60 before applying for the payment. It may be worthwhile contacting your super fund and asking them about the tax they'll be withholding if you claim the amount before and after age 60.

 

I'm an ATO employee voluntarily providing my time here

1 REPLY 1
Highlighted

Best answer

Devotee

Replies 0

Hi @AKGAZCA

 

A tax free withdrawal applies from age 60, not from reaching your preservation age.

 

Here's a link to information on ato.gov.au for super funds on the tax to withhold from lump sum payments.

 

The amounts withheld by super funds for non-residents depend on if there's a tax treaty in place between Australia and the person's country of residence. Basically, if the amount will be taxed overseas it won't be taxed in Australia. If it won't be taxed overseas the Australian tax treatment will apply.

 

So, if there's no tax treaty in place, or the tax treaty doesn't cause the super payment to only be taxed in the other country, and your super is being paid before age 60, then the answers are that your super will be taxed in the same way as if you were an Australian resident (except the medicare levy of 2% won't be withheld for a payment to a non-resident) and that the fund will withhold tax from the payment.

 

And again, if the payment will be taxed according to Australian tax rules rather than in your country of residence there's likely to be no tax payable if you wait until age 60 before applying for the payment. It may be worthwhile contacting your super fund and asking them about the tax they'll be withholding if you claim the amount before and after age 60.

 

I'm an ATO employee voluntarily providing my time here