Self-Managed Superannuation Funds (SMSF) make up a significant portion of the Australian superannuation environment, approximately 1/3 to put it in perspective. The result of this is that many Australian expats have left Australia and not put the right measures in place to ensure that their SMSF is compliant.

Unfortunately, the ‘head in the sand’ approach isn’t going to cut it here, as having a non-compliant SMSF as an Australian expat can be a costly mistake. To put this in context, your superannuation could be taxed at the highest marginal rate.

In order for your SMSF to remain compliant, it must pass three tests, which we’ve outlined below for you:

  1. Central Management and Control MUST be in Australia

This test specifically deals with where decisions regarding the SMSF are made, including investment strategies, performance reviews and any revision to the underlying investments of the fund.

An Australian expat living and working overseas with an SMSF, who is making changes to their SMSF at a strategic level, may in fact fail this test and be faced with the penalties associated.

  1. The Active Member Test

While a non-resident can be a member of a SMSF, it’s important to recognise that if their share of the fund is greater than 50%, then they can not be an active member. As a non-resident, they can be an active member if their share of the funds makes up less than 50%. In order to avoid being classified as an active member, it’s important that they don’t make contributions to the fund.

Where members are Australian tax residents this doesn’t apply.

  1. Establishment in Australia

This is a simple test outlining that your SMSF must be established in Australia.

The question now is what do you do if you’ve left Australian shores and still have your SMSF in place. Given the tax consequences of non-compliance could see your tax rate rise from 15% to 45% (ignoring the Medicare Levy), we can’t simply ignore it and cross our fingers. Thankfully, there are a number of relatively seamless options.

First, you can wind up your SMSF and contribute these funds into either a public offer superannuation fund or into a Small APRA Fund. The APRA Fund option is typically only suitable when certain assets are held within your SMSF, and it’s important to seek professional advice with regard to which option will be best for you.

Second, you could option to appoint a Power of Attorney to act as Trustee for your SMSF, which may be an attractive option whereby the fund holds fixed assets such as property. Again, it’s important to seek professional advice here to ensure that your superannuation remains compliant and you don’t face penalties in future.

If you do have a SMSF in place and would like to discuss the best options for you, feel free to contact us by clicking here or call us directly on +65 8282 5702.


To your financial success!

Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group, division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3

Australian Expatriate Group is licensed by Global Financial Consultants in Singapore, with a team of Australian-trained, experienced and qualified, allowing us to provide specialist advice to Australians living abroad.

To learn more about how we may be able to help you, please contact us:

✆        +65 8282 5702

To discuss how these changes affect you, click here to book a complimentary consultation:


General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.


*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.