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Tests key to new ATO ruling on residency

The ATO recently clarified its view on whether an Australian super fund would lose its residency status if it paid a pension to a non-resident member.

Townsends Business and Corporate Lawyers principal Peter Townsend said the question was recently put to the regular and its answer was contained in new private binding ruling 1012821532232.

“The ruling reviews the law and the ATO’s guideline, Tax Ruling 2008/9, about what constitutes an Australian super fund and the need for the fund to pass three important tests,” Townsend said.

“[The tests are whether] the fund was set up in Australia or has Australian assets, the fund’s central management and control is in Australia and the fund passes the so-called ‘active member’ test.

“The ruling confirms that as long as these three tests are met, the fund will remain an Australian superannuation fund and will not lose that status just because it pays a pension to a non-member resident.”

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