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Australian Lawyers and Consultants

SMSF's Attacked on Absent Trustees

© July 2005 by Joe Lederman, BALDWINS Australian Lawyers and Consultants

The Australian Taxation Office (ATO) has begun a hard line approach on self-managed superannuation funds (SMSF’s) whose trustees go overseas, even temporarily. In at least one case, the ATO is threatening a non-compliance ruling with the intention of applying Section 288A to confiscate nearly half the assets of the fund.

To remain a compliant fund, a self-managed superannuation fund must (among other requirements) remain a “resident” fund. Section 6E of the ITAA 1936 requires “central management and control” of the fund to remain in Australia, although that section contains some concessions.

In practical terms, the ATO takes the view that if the trustees of a self-managed superannuation fund leave Australia for more than 2 years, even if the absence is a temporary one and even if the trustees plan to return, then the fund ceases to be a resident fund and ceases therefore to be a compliant fund. Contact us if you have any clients facing any similar risk.

For further information, contact Joe Lederman at BALDWINS, Australian Lawyers & Consultants.

Return to the Baldwins Homepage or Australian Tax Law Library.