www.esuperfund.com.au

Collectables and Personal Use Assets


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Clients of ESUPERFUND are permitted to invest in collectables and personal use assets. Investments in such items must be made for genuine retirement purposes, not to provide any personal present-day benefits.

 
 
Definition of Collectables and Personal Use Assets

Collectables and personal use assets are:

  • Artwork (a painting, sculpture, drawing, engraving or photograph; a reproduction of such a thing; or property of a similar description or use);
  • Jewellery;
  • Antiques;
  • Artefacts;
  • Coins or medallions;
    • Coins and banknotes are collectables if their value exceeds their face value.
    • Bullion coins are collectables if their value exceeds their face value and they are traded at a price above the spot price of their metal contents.
  • Postage stamps or first day covers;
  • Rare folios, manuscripts or books;
  • Memorabilia;
  • Wine or spirits;
  • Motor vehicles and motorcycles;
  • Recreational boats;
  • Memberships of sporting or social clubs.

 
 
Investment Restrictions

When you purchase collectables and personal use assets for your SMSF, you must comply with all relevant investment restrictions detailed below:

Purchase

Collectables and personal use assets must be purchased in the name of your SMSF.

A copy of the tax invoice in the name of the Superfund for the initial purchase will be requested at financial year end as part of the annual compliance process.

Insurance

Collectables and personal use assets purchased by the Fund must be insured in the name of the Fund within seven days of the purchase. Your Fund's collectables and personal use assets may be insured under separate policies or collectively under the one policy, but it must be in the name of the Fund. You can't, for example, insure the assets as part of a Trustee's home and contents insurance.

Insurance policy statements evidencing that the asset has been insured in the name of the SMSF within 7 days of the acquisition and the insurance has been arranged to cover the whole reporting period will be requested at financial year end as part of the annual compliance process.

Uasge

Collectables and personal use assets can't provide a personal present-day benefit, so they can't be used by members or related parties of members.

The definition of a related party can be found on the ATO website here.

Display or Storage

Collectables and personal use assets must not be stored in the private residence of a related party. A private residence includes all parts of a private dwelling (above or below ground), the land on which the private residence is situated and all other buildings on that land, such as garages or sheds.

You can store (but not display) collectables and personal use assets in premises owned by a related party, provided it is not a private residence.

Leasing

You can only lease collectables and personal use assets to an unrelated party and the lease must be on arm's length terms.

Selling

Collectables and personal use assets can be sold to a related party provided the sale is at market price as determined by a qualified, independent valuer.

Valuation

To comply with the ATO’s valuation standards, collectables and personal use assets must be revalued to its market value on 30 June each Financial Year.

Documentation evidencing the market value and holding as at each financial year end will be requested as part of the annual compliance process.

 
 
Keeping Appropriate Records

When you purchase collectables and personal use assets for your SMSF, you will need to minute how the investment conforms to your Investment Strategy, reasons for the purchase of the asset, the insurance needs, the decision on where the item is stored etc. A Standard Purchase Minute can be found here.

Moreover, you also need to declare that the collectables & personal uses assets are not stored in private premises owned by a related party or used by any related parties etc. every financial year. A Standard Annual Minute can be found here.

 
 
Seeking a Tax Ruling from the ATO

Investing in collectables and personal use assets are complicated and we recommend that a Tax Ruling is sought from the ATO prior to investing in this Asset Class. More information can be found on the ATO website here.