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Tax treatment of transfers from foreign super funds

18 Jan 2012 11:26 AM -

If you have a superannuation lump sum from a foreign super fund transferred directly to an Australian super fund, you can choose to have all or part of the assessable part of the lump sum treated as assessable income of the Australian super fund.

By doing so, the Australian super fund pays the relevant tax on the assessable part of the lump sum at the concessional fund tax rate of 15%, rather than you paying tax at your marginal rate.

Example:

A taxpayer has $100,000 in a foreign super fund which is paid directly to an Australian super fund. Assume that the assessable amount of the payment is $20,000.

The taxpayer may choose to have $20,000 treated as assessable income of the Australian super fund.

The Australian super fund will include the $20,000 in its assessable income and the amount to be included in the taxpayer's assessable income will be reduced to $0.

Source: www.ato.gov.au

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