What happens when you withdraw your super from overseas?

Abel left Australia 10 years ago and wants to cash out his superannuation, or transfer it as a pension, but wants to know how it will be taxed.

Q. Abel
I am an Australian citizen, aged 70. I left Australia 10 years ago and I am about to either cash my superannuation or transfer it as a pension.

I would like to know if I will be subject to a tax from the ATO as I am no longer an Australian resident.

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A. This is a very complicated area, and your tax obligations will depend on the country you now call home.

This is such a tricky area, so it is extremely important to arrange professional tax advice to find out exactly how your superannuation income streams or lump sums will be taxed.

The way payments are treated from a tax perspective in foreign countries depends on a number of factors, but the most important is whether the country you are residing in is subject to a double tax agreement or not.

Read: Concessions help wealthiest Australians avoid tax

A double tax agreement, sometimes referred to as a tax treaty, reduces or eliminates double taxation caused by overlapping tax jurisdictions.

Australia has double tax agreements with more than 40 jurisdictions, and you can find a full list of these jurisdictions here.

There should be no tax payable in Australia on your super payments (again this is something you should check with a professional tax agent) but this does not mean that tax will not be payable in your country of residence.

Read: 13 worst super funds revealed

It is possible that non-resident rates of Australian tax may be levied on payments to members of untaxed (usually government or public sector funds) superannuation funds living overseas.

If someone in one of those funds is living in a country with which Australia has no double tax agreement, then there is the possibility of double tax applying in these situations.

Have you retired overseas and claimed your super as a lump sum? Did you have to pay tax on your super? Why not share your experience in the comments section below?

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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Ben



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