Does your Self Managed Superannuation Fund (SMSF) invest in Artwork or Collectables?

Collectables and personal use assets include artwork, jewellery, vehicles, boats and wine. Investments in these assets must be for genuine retirement purposes. That is, investments in superannuation funds must satisfy the “sole purpose test”. The sole purpose test is a test that ensures that a superannuation fund is maintained for the purpose of providing benefits to its members upon their retirement or for the benefit of the member’s beneficiaries if a member dies. That is the assets or investments are not to be acquired in a superannuation fund for day to day benefit. Therefore, collectables or personal use assets cannot be: • Leased to, or part of a lease arrangement with, a related party • Used by a related party • Stored or displayed in a private residence of a related party. In addition: • The decision on where the item is stored must be documented (for example, in the minutes of a meeting of trustees) and the written record kept • The item must be insured in the fund’s name within seven days of the fund acquiring it • If the item is transferred to a related party, this must be at market price as determined by a qualified, independent valuer. If you need assistance with your SMSF or determining if your super fund investments satisfy the sole purpose test, please contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment. The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.