Q: Our son is currently working overseas. Can he still make contributions to his Australian super fund?
A: Non-residents can make super contributions. So, if your son’s living overseas, he’s certainly allowed to make contributions to an Australian super fund. That could be a non-concessional contribution, so with after-tax money, or he could even make a concessional contribution and obtain a tax deduction, so long as he lodges an Australian income tax return, and within that return, there is income which should be offset with that concessional contribution.
If he hasn’t got any Australian income or any taxable income here in Australia, it would be a non-concessional contribution. Now, I hate to keep saying this and keep going back to it, but you do, of course, need to see if there are any super fund restrictions that apply. So, checking with the fund to make sure that they will allow a member who is not in Australia, and to make a contribution whilst they’re not here.
Now, again, I keep coming back to SMSFs, but this is an important one. There are some very specific rules that do apply to SMSFs.
The rules I’m referring to are all around what’s called the Australian superfund tests. There are some quite tight restrictions on contributions being made or being accepted into a fund by a non-resident fund member.
I’ll give you an example. My parents live here in Australia, and let’s just say that I’m a member of the fund and I go to live in England for two years. Whilst I’m away for two years, I would be best not to make contributions to my SMSF. I could make those contributions to another fund, and then when I come back to Australia, roll those contributions into my SMSF.
So long story short, yes, he can make contributions. Just check with the fund around their rules. If he has an SMSF, he just needs to be careful around that and check the SuperGuide article there around what the SMSF residency requirements are.
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