Metals Purchases defined as Collectables
Clients who purchase Physical Metals are permitted to take physical delivery and are not required to insure the Physical Metals, unless the Physical Metals are deemed to be Collectables. This restriction is a legal restriction imposed by Super Laws which disallow a SMSF to take Physical delivery of Collectables.
Definition of Collectables
The definition of Collectables includes jewellery, coins and medallions. There are onerous rules accompanying investing in Physical Metals that fall under the definition of Collectables, including that the Metals cannot be stored in the private residence of the Member or an associate of the Member and the Metals must be insured in the name of the SMSF within 7 days of the Metals being acquired. Where in doubt as to what constitutes a Collectable we strongly advise you to seek clarification with the ATO directly.
What this Means
Generally investing in Physical Metals that have no Collectable Value (for example Physical Metal Bars) will not be defined as a Collectable investment and will not be subject to the Collectables Rules above. This will mean that it is at your discretion as the SMSF Trustee as to where you store the Physical Metals and whether you insure the Physical Metals. However where the Physical Metal has a Collectable Value and hence falls within the definition of a Collectable (e.g. jewellery, coins and medallions) then the more onerous Collectables Rules above will apply meaning the Metals cannot be stored in your home and the Metals must be insured in the name of the SMSF within 7 days of being acquired. Typically storing Metals defined as Collectables with an external organisation (e.g. Bullion Capital Limited or a Safety Deposit Box with a Bank) will resolve these storage issues.