For many years Australians have ventured overseas to build their lives and careers, but before returning home to enjoy the fruits of that labour they faced a significant challenge. Whilst they were accumulating assets, investments and benefits from their various stints, when they returned they did not fit the Australian centric definitions of the Australian Tax Office (ATO).
This included individuals and families that built up pension benefits overseas, who returned to find that their overseas plan was not considered or treated as a superannuation plan but rather a foreign trust which regularly are subject to Section 99B treatment. This treatment was introduced to stop residents of Australia from accumulating income in foreign trusts that could be then transferred as untaxed capital in the future. In practice, it broadly means that Australian resident beneficiaries of foreign trusts are subject to capital gains tax on the trust income and gains in the year that it is generated at their individual marginal rate.
However, in the Income Taxation Assessment ACT (ITAA) of 1997 this was rectified by the introduction of a test of foreign pensions plans that if passed would denote them as a foreign superannuation fund making them subject to preferential treatment. Northland Group has for three decades been establishing and administering foreign superannuation funds that meet these standards.
A foreign superannuation fund, is your personal, portable retirement fund. Ideally suited to entrepreneurs, executives and families who have complex affairs or are considering overseas retirement, long-term international relocation, or migration. The structure is legally a trust. Under the structure, as a client you have your own separate private sub-trust to hold your designated assets. This means your assets are not pooled with other clients providing extra asset protection for you and investment discretion.
Global Flexibility
Freedom to retire in your country of choice and the flexibility to move between jurisdictions easily.
Tax Efficiencies
Allows you to provide more for your retirement with a flexible source of income.
Asset Protection
Assets are held on trust and generally provide a greater level of asset protection and estate planning benefits.
Diverse Assets
Open architecture and can be settled with any asset of value that is not used for personal use.
A foreign superannuation fund is made up of:
Overseas Resident Contributions
- Uncapped on initial or top up amounts
- Not subject to taxation on contribution*
- Not subject to taxation when drawn down*
Overseas Resident Income + Gains
- Not subject to taxation when generated*
- Not subject to taxation when drawn down*
What is an
Resident of Australia Contributions
- Uncapped on initial or top up amounts
- Not subject to taxation on contribution*
- Not subject to taxation when drawn down*
Resident of Australia Income + Gains
- Not subject to taxation when generated*
- Can be held in segregated account until other elements fully drawn down
- Potentially subject to taxation when drawn down
* The information does not take into account client’s objectives, financial situation or needs and clients should seek independent advice to see if the solution is appropriate for them.
Northland Trust Locations
Client's do not need to be a resident of these jurisdictions to base your plan there.
The Dual Fund Strategy
In certain jurisdictions, it is important to clearly identify and value your fund assets and segregate this amount into a ‘capital fund’, whilst allowing the income and growth to be ringfenced in a separate ‘income fund’. A Dual Fund Strategy will allow for separate investment mandates or strategies to be adopted in the differing sub-funds and to clearly identify your capital and income amounts for reporting purposes within a Northland Group foreign superannuation fund.
Find out more about our foreign superannuation fund solutions:
* The information does not take into account client’s objectives, financial situation or needs and clients should seek independent advice to see if the solution is appropriate for them.
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