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Self Managed Super Funds - March 2016

SMSFs have until 30 June 2016 to comply with strict new rules for collectables and personal use assets

There are strict new rules for collectables and personal use assets (such as artworks) which all SMSFs must comply with by 30/6/2016.

Collectables and personal use assets are:

  • artwork – including paintings, sculptures, drawings, engravings and photographs
  • jewellery
  • antiques
  • artefacts
  • coins, medallions or bank notes
    • 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 content
  • 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.

After 30/6/2016 collectables and personal use assets cannot be:

  • leased to, or part of a lease arrangement with, a related party;
  • used by a related party; or
  • stored or displayed in a private residence of a related party.

In addition, after 30/6/2016:

  • the investment must comply with all other relevant investment restrictions, including the sole purpose test;
  • 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; and
  • if the item is transferred to a related party, this must be at market price as determined by a qualified, independent valuer.
We recommend that SMSFs take the necessary steps to comply with these new rules by 30/6/2016. If this is not possible, the SMSF should dispose of the collectables and personal use assets by 30/6/2016, either by receiving cash or by transferring the artworks to the members in-specie.