SMSF’s are allowed to invest in alternative assets or collectables such as antiques and wine. But before you head to the liquor store or art gallery make sure you understand how the collectable rules work.

Do you have a keen eye for art or an interest in coins and memorabilia? Well perhaps you should consider purchasing these assets within your SMSF if you believe these collectables will increase in value over time.

It is very important however that you abide by the strict regulations to ensure your fund does not breach the rules.

What can and can’t you do?
Collectables and personal use assets can’t 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:

  • your investment must comply with all other relevant investment restrictions and must be made for genuine retirement purposes
  • the decision on where the collectables are 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.

Make sure your investment strategy covers this type of asset prior to purchase

What are considered collectables?

  • Paintings
  • Jewellery
  • Antiques
  • Wine & Spirits
  • Coins & medallions
  • Memorabilia
  • Motor Vehicles
  • Boats
  • Club Memberships

For a full list visit the ATO website

https://www.ato.gov.au/super/self-managed-super-funds/investing/restrictions-on-investments/collectables-and-personal-use-assets/

 

If you’re thinking of investing in collectables and need some expert advice on what you can and can’t do contact us now.

 

This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.