Legislation has recently made the SMSF residency trap much tougher.
The general rule If the central management and control of a SMSF — that is, the trustees or the directors of a corporate trustee — is ordinarily outside Australia, then the SMSF ceases to be an Australian super fund. If that happens, the SMSF's assets and income are likely to be taxed at the highest tax rate.
Old way out Under the old rules, SMSF trustees (or directors of the trustee) could return to Australia for 28 days in each 2 year period to be treated as "ordinarily in Australia" and so escape the trap.
New rule If SMSF trustees (or directors of the trustee) are based outside Australia for 2 years, then the SMSF's central management and control will be outside Australia. In that case, the fund will not be an Australian superannuation fund. The legislation does not give the ATO any discretion. If you are a SMSF trustee (or director of the trustee) and are planning an extended absence from Australia, you should seek professional advice.
