Can a Non Resident Make a Contribution to Super and Claim a Deduction ?
Some non residents have positive rental income and want to make a contribution to superannuation and claim a deduction to minimise their overall tax position. Where the non resident provides a valid notice of intent to claim the deduction to the Fund and the Fund acknowledges receipt of this notice, the deduction is not more than the amount covered by the notice and the deduction does not create or increase a loss to be carried forward the taxpayer will satisfy all the required conditions to claim a deduction.
The tax act requires that if a taxpayer is engaged in any activities that results in them being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA 1992), to deduct a contribution, less than 10% of the total of the following must be attributable to those activities:
- their assessable income for the income year;
- their reportable fringe benefits (RFB) total for the income year;
- the total of their reportable employer superannuation contributions (RESC) for the income year.
In regards to the maximum earning as an employee condition TR 2010/1 states at paragraph 65: “In the application of the maximum earnings test, the relevant ’employment’ activity need not be an activity in Australia. For a non-resident, the income attributable to employment outside Australia is not assessable income in Australia and so will not be counted in the maximum earnings test.” If the only Australian income is rental income then this test would be satisified. This can be a useful strategy where the non-resident wants to minimise their overall tax position as non residents do not receive the tax free threshold.