Private ruling: Foreign pension
Published: February 2015
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Question and answer | Is the superannuation lump sum transferred to Australia from a country A fund assessable in Australia? | Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a resident of Australia for taxation purposes. You have been living in Australia over 20 years. A lump sum superannuation payment was transferred to you in Australia from a country Y fund.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 305-60(1).

Reasons for decision: Summary: When you transfer your superannuation lump sum from the country Y pension fund to Australia, the amount will be taxable in Australia. This is the case even though the superannuation lump sum from your country Y pension fund is tax-free in country Y However, there are circumstances where the lump sum may be tax-free in Australia. A lump sum amount that you receive may be tax-free if you receive it within 6 months of being an Australian resident. Subsection 305-60(1) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a superannuation lump sum payment that you receive is not assessable income and is not exempt income if: a. you receive it within 6 months of becoming an Australian resident; and b. it relates only to a period: i. when you were not an Australian resident; or ii starting after you became an Australian resident and ending before you receive the payment; and c. it does not exceed the amount in the fund that was vested in you when you received the payment. Accordingly, you do not satisfy the criteria in subsection 305-60(1) of the ITAA 1997, as you have been a resident of Australia for taxation purposes since 19XX and you received the lump sum payment in the particular income year which is not within 6 months of you becoming a resident of Australia. The superannuation lump sum amount that you transferred from the country Y pension fund in Australia will be subject to tax and will be taxed at your marginal tax rate. Please note: There is no other provision of the law which would exempt the lump sum payment from being taxed in Australia.