If you are living overseas and have been watching your Australian super balance grow, sooner or later the obvious question comes up: when can I access it, and what tax – Australian, foreign, or both – will I actually pay?
For Australian residents the answers are reasonably well-known. Once you hit 60 and meet a condition of release, super from a taxed source is generally tax-free.
For Australian citizens living overseas as non-residents for tax purposes, the headline answer is the same – but the planning question is different. The real issue is rarely Australian tax. It is the tax treatment of your withdrawal in your country of residence, and how the relevant tax treaty (if any) interacts with that.
This guide explains when you can access your super from overseas, what Australian tax (if any) applies, and how to think about the timing and structure of your drawdown if you have already retired or are getting close. We assume throughout that you are an Australian citizen or permanent resident – not a temporary visa holder. Temporary residents are subject to a separate regime (DASP), which we touch on briefly below.
What is preservation age, and when can you access your super?
Before you can withdraw your super, you need to have reached your preservation age and met a condition of release.
Preservation age is the minimum age at which you are allowed to access your super. It depends on when you were born:
- Born before 1 July 1960: preservation age is 55
- Born 1 July 1960 to 30 June 1961: preservation age is 56
- Born 1 July 1961 to 30 June 1962: preservation age is 57
- Born 1 July 1962 to 30 June 1963: preservation age is 58
- Born 1 July 1963 to 30 June 1964: preservation age is 59
- Born on or after 1 July 1964: preservation age is 60
The transitional period is now complete. For anyone born after 30 June 1964 – which covers most people in their 50s planning early retirement – preservation age is 60.
Conditions of release
Reaching preservation age is not enough on its own. You also need to meet a condition of release. The main ones are:
- Retirement / ceasing employment: If you are under 60 but have reached preservation age, the trustee generally needs to be satisfied you have retired and do not intend to become gainfully employed for 10 or more hours per week again. If you are 60 or over, ceasing an employment arrangement (resigning, contract ending, redundancy, etc.) itself satisfies a condition of release for benefits accumulated up to that point – you do not have to prove permanent retirement. Once you reach 65, you can access your super regardless of work status.
- Permanent incapacity or terminal medical condition: These allow early access regardless of age.
- Transition to Retirement (TTR): If you have reached preservation age but are still working, you can start a TTR income stream. Standard rules: a minimum drawdown of 4% per year, a maximum of 10% of the account balance per year, and no lump sum payments can be drawn from a TTR while it remains a TTR.
If you are living overseas in genuine retirement – past preservation age, out of the workforce, and not planning to return to full-time work – you most likely meet the retirement condition of release. Your fund will ask you to confirm this, usually by statutory declaration.
The Australian tax treatment of super withdrawals – the part most expats get wrong
This is the area where assumptions and reality diverge most sharply. Many people we speak with believe that being a non-resident triggers a flat punitive Australian tax rate on their super. For Australian citizens or permanent residents drawing from a complying superannuation fund (whether APRA-regulated or a complying SMSF) with a taxed source, that is not the rule.
The starting point: ITAA 1997 s 301-10
The governing provision for super benefits received at age 60 or over is section 301-10 of the Income Tax Assessment Act 1997. It reads:
“If you are 60 years or over when you receive a superannuation benefit, the benefit is not assessable income and is not exempt income.”
That treatment – known as non-assessable, non-exempt (NANE) income – applies to both lump sums and superannuation income stream benefits paid from a complying taxed source. The section contains no residency carve-out. It applies to residents and non-residents alike.
Important caveat: s 301-10 applies to benefits from a taxed source. If the benefit includes an untaxed element (common in some defined benefit and public sector schemes), Subdivision 301-C of the ITAA 1997 contains separate rules – including s 301-95 for lump sums and s 301-100 for income streams. We deal with untaxed elements separately below.
The practical effect: if you are an Australian citizen aged 60 or over, retired overseas, and you draw a lump sum or pension from your Australian super fund, the Australian tax on the taxed element of the taxable component is generally zero – exactly as it would be for an Australian-resident retiree of the same age.
What the ATO’s withholding schedule says
The same answer is reflected in the ATO’s withholding schedule. Schedule 12 (Tax table for superannuation lump sums), in force from 1 July 2025, sets out the rates super funds must apply to lump sum payments. For a foreign-resident recipient, the payer should first consider whether a tax treaty affects Australia’s taxing right at all. If the relevant treaty makes the benefit assessable only in the country of residence, no Australian withholding is required. If the benefit remains assessable in Australia, Schedule 12 directs the fund to apply Table A but exclude the 2% Medicare levy component.
Table A specifies the following rates for the taxed element of the taxable component:
- Under preservation age: 22% (resident, includes Medicare) – for a foreign resident, 20% (Medicare excluded)
- Aged 60 and above: Nil – for resident and foreign resident alike
For amounts paid between preservation age and age 60, the resident rate is 0% up to the low rate cap and 17% (15% plus Medicare) above the cap for the taxed element. The non-resident equivalent is 0% up to the low rate cap and 15% above it.
The low rate cap amount for the 2025-26 income year is $260,000. It is a lifetime cap, indexed in line with AWOTE in $5,000 increments.
The exception: the untaxed element
The picture changes if part of your super contains an “untaxed element”. An untaxed element typically arises in certain public sector and defined benefit schemes – Commonwealth Superannuation Scheme, Public Sector Superannuation Scheme, some state government schemes, and certain constitutionally protected funds.
For an untaxed element of a lump sum paid to a resident aged 60 and over, the rate is 15% (plus Medicare, so 17%) up to the untaxed plan cap, and the top marginal rate above the cap (ITAA 1997 s 301-95). For a foreign resident, the non-resident equivalents apply with the 2% Medicare levy removed.
The untaxed plan cap for 2025-26 is $1,865,000 per super plan. This is a per-plan limit, not a lifetime one.
Untaxed-element income streams follow a separate framework under s 301-100 of the ITAA 1997, with their own offset and capping mechanics (including the defined benefit income cap). If your benefit will be paid as a defined benefit pension with an untaxed element, the analysis is different again and warrants specific advice.
If your benefit contains a meaningful untaxed element, this is the area where genuine tax leakage can occur – and where modelling is most valuable.
Drawing super before age 60 as a non-resident
For a foreign resident drawing between preservation age and 60, the taxable component remains assessable in Australia, but Division 301 limits the outcome for taxed elements: nil up to the low rate cap ($260,000 for 2025-26) and a maximum 15% rate above the cap. The 2% Medicare levy does not apply to foreign residents.
For superannuation income streams received between preservation age and 60, the 15% tax offset on the taxable component under s 301-25 of the ITAA 1997 is the relevant concession. There is no residency restriction in s 301-25 – it applies whether the recipient is a resident or non-resident.
What this means in practice
For an Australian-citizen expat aged 60 or over, drawing from a complying superannuation fund (APRA-regulated or SMSF) with a taxed source:
- The tax-free component is paid without Australian tax
- The taxed element of the taxable component is paid without Australian tax (NANE under s 301-10)
- Any untaxed element follows separate rules – concessional rates within the cap, top marginal rate above
For most people in this position with a balance built up through ordinary employment contributions, the Australian tax on the withdrawal is, in fact, zero. The planning question is what happens in your country of residence.
Why the real planning question is foreign tax, not Australian tax
Because s 301-10 takes most super benefits out of the Australian tax base at age 60, the meaningful tax question for most expats is whether the country in which you now live taxes the withdrawal under its own rules.
Country-of-residence treatment varies widely:
- United Kingdom: HMRC’s treatment of Australian super benefits remains technically fact-specific, particularly for lump sums. Periodic pension payments are generally accepted as being within Article 17 of the UK-Australia DTA (and therefore taxable only in the UK). HMRC’s published guidance on foreign pension lump sums now contains detailed rules under which certain lump sums from foreign pension schemes are fully taxable for UK residents, subject to statutory reductions and treaty analysis. Expect UK tax to apply to whatever the UK characterises as the income element of the withdrawal, and get UK-specific advice before electing a lump sum.
- United States: The most complex jurisdiction for Australian super holders. The US generally does not recognise Australian superannuation as a qualified retirement plan. The US-Australia DTA contains a saving clause in Article 1(3), subject to the Article 1(4) exceptions, which preserves the US’s right to tax its citizens and residents largely as if the treaty did not exist. Article 18 of the treaty allocates pension taxing rights to the country of residence, but Article 18(4) defines “pensions and other similar remuneration” as periodic payments – so the treaty’s protection for an Australian super lump sum (as opposed to a pension stream) paid to a US resident is materially weaker than the OECD Model would suggest. The US position on Australian super contributions, accumulation-phase earnings, and withdrawals is contested and depends on whether the fund is treated as a grantor trust, an employees’ trust, or otherwise. Specialist US tax advice is essential – generic Australian advice is not enough.
- Singapore: Foreign-source income received by an individual not through a Singapore partnership is generally exempt from Singapore tax (subject to the IRAS conditions). A pension or lump sum paid from an Australian super fund to a Singapore resident retiree typically falls within that exemption. This makes Singapore one of the more straightforward residence countries for Australian super withdrawals after age 60, although the IRAS conditions should be confirmed in each case.
- UAE: The UAE does not levy personal income tax on individuals. For a UAE-resident individual drawing from a taxed Australian super fund after age 60, the usual result is no Australian tax on the taxed element and no UAE personal income tax. Banking, exchange-rate, and timing of funds transfer are the main practical issues.
- European jurisdictions: Treatment varies significantly. Some tax foreign pensions or lump sums under ordinary progressive rates; others have concessional, transitional, or special inbound-resident regimes. Portugal, Spain, and Italy all require country-specific analysis because domestic characterisation and treaty interaction can materially change the outcome. Some jurisdictions distinguish between pensions and lump sums in their domestic law in ways that diverge from the OECD Model. Country-specific advice is essential.
The general drafting point: the country in which you receive the payment, not Australia, is the country whose tax law will most often dictate the outcome.
DTAs and the pensions article: what the OECD framework actually says
Australia has Double Tax Agreements with most of the countries Australian expats commonly retire to. A natural question is whether the relevant DTA changes the analysis.
For super benefits, the relevant treaty provision is the pensions article. Under the OECD Model Tax Convention, this is Article 18; in the actual UK-Australia treaty it is Article 17; in the actual US-Australia treaty it is Article 18.
The standard OECD wording is:
“Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.”
That is: the State of residence has the exclusive right to tax pensions. The State of source has no taxing right at all.
Do lump sums fall within the pensions article?
Yes – at least under the OECD position. The Commentary on Article 18 is explicit:
“While the word ‘pension’, under the ordinary meaning of the word, covers only periodic payments, the words ‘other similar remuneration’ are broad enough to cover non-periodic payments. For instance, a lump-sum payment in lieu of periodic pension payments that is made on or after cessation of employment may fall within the Article.” (Para 5, Commentary on Article 18)
Paragraph 6 of the Commentary provides interpretive factors, noting in particular that “if it is shown that the consideration for the payment is the commutation of the pension or the compensation for a reduced pension then the payment may be characterised as ‘other similar remuneration’ falling under the Article”. A lump sum paid in commutation of pension rights may therefore fall within a pensions article where the treaty wording is broad enough. However, the OECD Commentary is interpretive material, not treaty text, and bilateral treaty wording varies materially – so this must always be tested against the actual treaty text and against the domestic tax law of the residence country.
Treaty-specific wording matters
Bilateral treaty drafting varies. The UK-Australia DTA uses “pensions (including government pensions) and annuities” (Article 17), which is narrower than the OECD’s “pensions and other similar remuneration”. Whether a lump sum falls within “annuities” rather than “other similar remuneration” remains a live question in HMRC practice.
The US-Australia treaty (Article 18) allocates primary taxing rights over pensions to the country of residence, but Article 18(4) defines “pensions and other similar remuneration” as periodic payments – meaning lump sums are not clearly within the protection of Article 18. In addition, the treaty’s saving clause in Article 1(3) (subject to the Article 1(4) exceptions) allows the US to tax its citizens and residents largely as if the treaty did not exist.
Practical takeaway
For most expats over 60 drawing super from a complying taxed Australian fund:
- Australia has nothing to tax in any event (s 301-10 NANE)
- The DTA’s primary function is to allocate taxing rights between the two countries – which will usually result in the actual tax (if any) being levied in your country of residence
- A DTA is intended to allocate taxing rights and reduce juridical double taxation, but it does not guarantee a tax-free outcome and does not remove the need to apply domestic law in both countries
Lump sum or income stream: how to think about the choice
Once you have met a condition of release, you can take your super as a lump sum, an account-based pension, or a combination.
Lump sum
A lump sum gives you the full balance (or a portion) in one payment. For a non-resident citizen 60+ drawing from a taxed Australian fund, the Australian tax position is straightforward – typically zero. The complications sit on the foreign side: how does your country of residence tax a lump sum from a foreign pension scheme?
Some countries treat a lump sum as fully taxable income in the year received (high marginal-rate exposure). Others treat all or part of it as capital. Others have specific regimes for foreign pension lump sums. Country-specific advice is essential before you elect a lump-sum option.
Income stream (account-based pension)
An account-based pension pays your balance progressively. For a non-resident citizen 60+, Australian tax is again typically zero – the income stream is NANE under s 301-10. The foreign-tax question is whether your country of residence treats periodic pension payments differently from a lump sum (often more favourably), and whether the DTA changes that result.
The 15% pension tax offset that the article on this topic sometimes refers to (s 301-25, ITAA 1997) applies to taxable component income stream payments received between preservation age and 60 – not to recipients aged 60+ (whose payments are NANE in any event).
What usually drives the decision
For most expats, the lump sum vs income stream choice is not primarily about Australian tax. It comes down to:
- How your country of residence taxes lump sums versus periodic pensions
- Currency-management preferences (drawing in AUD into a foreign currency account)
- Investment management – whether you want to manage the capital yourself or have the fund manage it
- Estate planning – particularly the tax treatment of any residual balance on death
- Age pension means testing if you intend to return to Australia and may qualify
DASP: what it is, and why it does not apply to Australian citizens
The Departing Australia Superannuation Payment (DASP) regime is the part of the system that is for temporary residents, not Australian citizens.
DASP is generally available to former temporary residents who held an eligible temporary visa, have permanently departed Australia, and whose visa has ceased to be in effect. The fund withholds tax under separate DASP rates before payment:
- Tax-free component: nil
- Taxed element of taxable component: 35% (non-WHM); 65% (Working Holiday Maker contributions)
- Untaxed element of taxable component: 45% (non-WHM); 65% (WHM contributions)
DASP is not available to Australian citizens, Australian permanent residents, or New Zealand citizens. If you are an Australian citizen retired overseas, DASP is not your mechanism – you access super through the standard conditions of release described above, and the standard tax treatment (including s 301-10 NANE at 60+) applies. The 35% and 65% DASP withholding rates are not relevant to you.
This is a common source of confusion. The DASP rates are the rates that show up in much of the online discussion of “non-residents and super”, but they are a separate regime that does not apply to Australian-citizen expats.
SMSFs and overseas retirement: structural issues to think about
Australian expats who hold their super through a self-managed super fund (SMSF) face issues that members of APRA-regulated funds do not.
An SMSF must satisfy three tests in ITAA 1997 s 295-95(2) to remain an Australian superannuation fund (and therefore eligible for complying tax status):
- Establishment test: The fund was established in Australia, or at least one of its assets is located in Australia.
- Central management and control (CMC) test: The CMC of the fund is ordinarily in Australia.
- Active member test: If there are active members (i.e. members making contributions or having contributions made for them), at least 50% of the active member balances must belong to Australian residents.
The CMC test is where most expats run into trouble. ITAA 1997 s 295-95(4) allows the fund’s CMC to be temporarily outside Australia for a period of not more than two years. The two-year window is not a blanket “safe harbour” – the ATO’s position in TR 2008/9 is that what matters is the trustee’s intention. An absence that was always intended to be permanent does not get two years of grace.
If the fund fails any of these tests, it can become a non-complying superannuation fund. The consequences are severe: the market value of the fund’s assets (less non-concessional contributions) can be taxed at 45% in the year of non-compliance, and future fund income can be taxed at 45% rather than 15%.
Practical options for SMSF members retiring overseas on an open-ended basis include:
- Appoint an Australian-resident director or co-trustee who genuinely participates in the high-level decision-making. Adding a name to ASIC records is not enough – the Australian director must actually exercise CMC.
- Grant an enduring power of attorney to an Australian-resident attorney, who then acts as trustee or director in place of the member. SMSFR 2010/2 confirms that s 17A(3)(b)(ii) of the SIS Act allows this without breaching the trustee-member alignment requirement.
- Wind up the SMSF and roll the balance to an APRA-regulated fund.
If your SMSF holds a Total Super Balance approaching or exceeding the Division 296 thresholds, that regime is an additional consideration that interacts with the residency question. Division 296 was enacted by the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 (Cth) and the Superannuation (Building a Stronger and Fairer Super System) Imposition Act 2026 (Cth), both of which received assent on 13 March 2026 and commence on 1 July 2026. The regime applies an additional 15% tax on earnings attributable to the portion of an individual’s TSB above the Large Super Balance Threshold (initially $3 million), with a further additional 10% (so 25% in total over and above the existing 15% fund tax) on earnings attributable to the portion of TSB above the Very Large Super Balance Threshold (initially $10 million). Both thresholds are indexed. Foreign superannuation interests are excluded from the TSB calculation. We discuss Division 296 separately in this article.
The strategic question: draw down now, or later?
For most Australian-citizen expats over 60 drawing from a complying taxed superannuation fund, the timing question is not an Australian-tax question. There is no significant Australian tax to time.
The timing decision instead turns on:
- Country-of-residence tax treatment. If you are about to move from one country to another, and the two countries treat Australian super differently, the move itself can be the planning event.
- Returning to Australia. If you plan to return and re-establish Australian tax residency, drawing super while resident may simplify administration but does not necessarily reduce tax (because the Australian tax is already nil).
- Untaxed elements. If your super contains a meaningful untaxed element, the Australian-tax leakage is real, and the timing question becomes meaningful again.
- Currency risk. Your super sits in AUD. Depending on your view of AUD relative to your country of residence’s currency, you may prefer to crystallise sooner or later.
- Legislative risk. Division 296 commences 1 July 2026 with an additional 15% tax on earnings attributable to TSB above $3 million, plus a further 10% layer on earnings attributable to TSB above $10 million. The thresholds are indexed but the rules will continue to evolve. Sitting in super is not risk-free.
Drawing down sooner tends to make more sense when:
- Your balance is close to, or above, the Division 296 thresholds
- Your country of residence has favourable treatment of Australian super withdrawals (or no income tax)
- You need the capital for a specific purpose
- Your fund has a significant untaxed element where the long-term Australian-tax cost of staying in is high
Waiting tends to make more sense when:
- Your country of residence treats foreign pension lump sums punitively but treats Australian super income streams favourably under a DTA (the UK is the classic example here for periodic payments)
- You have other income to meet near-term needs and prefer to preserve the concessional super environment
- You are close to, but not yet at, preservation age
None of this is a decision to make on the back of an article. It requires modelling against your specific component mix, your residency position, your country of residence’s tax treatment of Australian super, and your timeline.
Steps to access your super from overseas
Once you have decided to act and you meet a condition of release, the process is manageable, though it takes some coordination.
1. Contact your super fund. Most large funds handle withdrawal requests online or by form. SMSF members initiate payments through the fund’s trust deed process.
2. Confirm your identity. Super funds require identity verification for significant withdrawals. If you are overseas, you will likely need certified copies of identification. Australian embassies and consulates can certify documents, as can Australian solicitors or other authorised persons.
3. Provide bank account details. Payment mechanics vary by fund. Some funds can pay overseas or arrange international transfers; others may require payment to an Australian bank account. Most funds pay in AUD – converting to your local currency is your responsibility. Confirm the fund’s process before initiating the withdrawal.
4. Confirm your TFN is on file. If your fund does not have your Tax File Number, the no-TFN withholding rates in Schedule 12 apply (45% on the taxable component for a foreign resident under 60; nil on the taxed element 60+ but 45% on any untaxed element). Check before you lodge the withdrawal request.
5. Get a breakdown of the components. Ask your fund to provide a clear statement showing the tax-free component, taxable component (taxed element), and any untaxed element. You will need this for your country-of-residence tax return.
6. Lodge tax returns where required. In your country of residence, the foreign income may need to be declared. Even where Australia imposes no tax, your country of residence may, and the timing and characterisation of the payment in their system matters.
When to get advice
Super drawdown from overseas is not a single calculation. The outcome depends on your fund’s component mix, your tax residency, your age, other Australian-source income, whether and how a DTA applies, and how your country of residence taxes the withdrawal.
The two areas where we most often see clients make avoidable errors:
- Assuming Australian tax is the binding constraint. For most over-60 retirees drawing from a complying taxed fund, it is not. Spending time optimising an Australian tax position that does not exist while ignoring the country-of-residence tax position is a common mistake.
- Acting before getting cross-border advice. The country-of-residence treatment, and the DTA interaction, often dictate the optimal form (lump sum versus income stream) and timing of the withdrawal. Once the money is out, the planning options are closed.
If you are planning a major super withdrawal from overseas, or approaching the point where you could access your super and want to understand your options, we recommend getting cross-border tax advice before you act.
Book a retirement planning consultation
Key facts at a glance
- Preservation age for anyone born after 30 June 1964 is 60
- ITAA 1997 s 301-10 makes super benefits received at age 60+ from a complying taxed source non-assessable, non-exempt income – for residents and non-residents alike
- For a foreign-resident Australian citizen aged 60+, the ATO’s withholding schedule (Schedule 12) directs nil withholding on the taxed element of the taxable component
- The low rate cap for 2025-26 is $260,000 (lifetime); the untaxed plan cap is $1,865,000 (per plan)
- Untaxed elements (common in some government and defined benefit schemes) are taxed at 15% (plus Medicare for residents) up to the untaxed plan cap and top marginal rate above
- TTR income streams: minimum 4% drawdown, maximum 10% per year, no lump sums from the TTR itself
- DASP is the temporary-resident regime (35% non-WHM, 65% WHM on taxable component) – it does not apply to Australian citizens or permanent residents
- SMSFs require structural attention if a trustee will be overseas for more than 2 years
- Under the OECD Model and most Australian DTAs, the pensions article (Article 18 OECD; Article 17 UK-Australia; Article 18 US-Australia) generally gives the country of residence the exclusive right to tax pensions; the OECD Commentary confirms that lump sums made in lieu of, or in commutation of, periodic pensions can fall within this article
- For Australian-citizen expats over 60, the meaningful tax planning question is almost always how your country of residence taxes the withdrawal – not Australian tax
- Division 296 commences 1 July 2026, with the first affected year being 2026-27. It imposes an additional 15% tax on earnings attributable to a Total Super Balance above $3 million (the Large Super Balance Threshold), with a further additional 10% layer on earnings attributable to a TSB above $10 million (the Very Large Super Balance Threshold). Both thresholds are indexed; foreign super interests are excluded from TSB
Disclaimer: This article is general information only and does not constitute personal tax, financial, legal, or investment advice. It has been prepared without regard to your objectives, financial situation, or needs.
The information is current as at the date of publication and reflects the Australian law, ATO guidance, and relevant international tax treaties as we understand them at that time. Superannuation rules, tax rates, thresholds, treaty positions, and ATO interpretive guidance change frequently. The application of these rules to your particular situation depends on facts we do not know, including your tax residency status, the composition of your superannuation benefit, your country of residence, your other income, and your future plans.
Cross-border superannuation decisions are typically irreversible once made. Before acting on anything in this article – including initiating any withdrawal, election, or rollover – you should obtain advice specific to your circumstances from an appropriately qualified Australian tax adviser, and where relevant, a tax adviser in your country of residence.
Expat Taxes Australia, its directors, employees, and associates accept no liability for any loss arising directly or indirectly from reliance on this article.
