Date posted: 12/05/2021 2 min read

Australian Federal Budget 2021-22 - SMSF residency rules to be relaxed

People living overseas and satisfying the new rules will be allowed to contribute to their fund

In Brief

  • CA ANZ welcomes these changes which makes compliance easier
  • New rules likely to take effect from 1 July 2022

The Federal Government will amend the super fund residency rules which technically apply to all super funds but in practice only apply to self-managed super funds (SMSF), says Tony Negline, Superannuation Leader at Chartered Accountants Australia and New Zealand.

  • Central control and management – the safe harbor will increase from two years to five years
  • The active member test will be abolished

The requirement to have at least one asset based in Australia is likely to remain.

As a result of these changes, those living overseas and satisfying these rules will be allowed to contribute to their SMSF.

"This is a welcome change that shows government has listened to industry," said Negline.

The change will commence from the start of the first financial year after the enabling legislation receives Royal Assent.  The government expects this to be from 1 July 2022 onwards.

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