When will your fund remain an ‘Australian Superannuation Fund’?
Your SMSF must meet all of the following conditions to be an ‘Australian Superannuation Fund’:
- First condition– your SMSF was established in Australia, or has at least one Australian asset. Your SMSF will normally meet this requirement.
- Second condition– your SMSF’s strategic decisions and high-level management activities must be conducted within Australia (not overseas). Such activities include: assessing the performance of your fund’s investments and reviewing your fund’s investment strategy.
However, there is a two-year ‘safe harbour’ concession that applies where the trustees or directors are temporarily absent from Australia. The concession allows decisions about the fund to be made abroad for up to two years without breaching this condition. However, if the trustees intend to relocate permanently overseas, this concession will not apply from the time the they leave Australia. If at least one trustee remains in Australia it is possible the SMSF may meet this condition if authorised under the trust deed of the SMSF.
- Third condition– your SMSF meets this condition if:
(a) your fund has no active members (being members who actively contribute to your SMSF, or who have contributions made for them); or
(b) your fund has active members who are Australian residents, and they hold (in broad terms) at least half of the total superannuation savings of your SMSF.