Up until 1 April 2014, if you had funds in foreign superannuation scheme, you were taxed on an accrued or deemed income basis under the Foreign Investment Fund (FIF) rules.
Proposed new rules came in on 1 April 2014. These rules effectively tax the funds in foreign superannuation schemes on a withdrawals basis. In a large amount of cases, lump-sum amounts from foreign superannuation schemes will only be partially taxed. Also current exemptions for transfers from Australian superannuation schemes will continue. Transfers made into Australian superannuation schemes from other foreign schemes however may be taxable.
If you have previously complied with the FIF rules, you may choose to continue using the FIF rules applying prior to 1 April 2014 or to apply the new rules, depending on which is more appropriate for your circumstances.
As part of the new rules, an additional optional method is available to tax withdrawals up to 31 March 2014, including concessions for withdrawals or transfers that have not complied with the current FIF rules.
If you have any queries whatsoever, don’t hesitate to contact your wellington accountant.