SMSF Residency Requirements to be Relaxed (Budget 2021 Alert)

| Wealth

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:

  1. Extending the central management and control safe harbour provision from two to five years; and
  2. 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).

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