As part of the Budget, the Government announced that it will relax residency requirements for self-managed superannuation funds (SMSF).
Currently a superannuation fund must satisfy the following residency test:
- Have been established in Australia or have assets of the fund situated in Australia;
- Have its central management and control ordinarily in Australia; and
- Satisfy the ‘Active Member Test’.
The proposed amendments are to ease the residency test by:
- Extending the central management and control safe harbour provision from two to five years; and
- Removing the ‘Active Member Test’.
This will be welcome news to Australians who have a SMSF and plan to travel outside Australia for greater than two years (and up to five years).