ECPI calculation for funds receiving transfers from foreign funds

Transfer of foreign funds

For SMSFs that are in pension phase, ATO ID 2012/47 outlines that all rollovers and contributions made (regardless of the taxable or non-taxable nature of these amounts) are to be include as assessable income for the purpose of determining the available deductions for fund expenses.

TR93/17 states that general administrative expenses relevant to the operation of the fund as a whole can generally be apportioned according to the formula:

Deductions = General administrative expenses x (Assessable income / Total income)

When an SMSF receives amounts transferred from foreign super funds, e.g. UK pension funds, you are to report the amounts as income in that year’s tax return under Label F of Section B.

According to the ATO, transfers from foreign funds or schemes are not exempt from income tax under the exempt current pension income rules.

The following flowchart provides an understanding of how ECPI should be calculated for funds receiving transfers from foreign funds:

Transfer of foreign funds to super diagram


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DISCLAIMER: This information is an interpretation of rules, regulations and standards. It should not be considered as general or specific advice and neither purports, nor is intended to be advice on any particular matter. No responsibility can be accepted for those who act on the contents of this publication without first obtaining specific advice. Liability limited by a scheme approved under Professional Standards Legislation.