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FIND MANNINGHAM | NOVEMBER 2021
www.findmanningham.com.au
SMSF Trustees – Should You Purchase Collectables? ACCOUNTANT By Warren Strybosch
SMSFs trustees need to be aware of the various compliance risks surrounding collectables, as the asset class requires continued consideration and how it can impact a SMSF. With low interest rates, SMSF trustees are looking for alternative investments to place their funds into which has led to an increase in collectables within SMSFs. However, care needs to be given to the restrictive rules surrounding the holding of collectables in a SMSF. Collectables and personal-use assets include artwork, jewellery, antiques, artefacts, coins, stamps, books, memorabilia, wine, cars, bikes, recreational boats and club memberships. Bullion is not included as its value is based on intrinsic weight and purity. One of the restrictions with collectables, is that they cannot be leased or used by a related party or stored in a private
residence of a related party. The SMSF can only lease them to unrelated parties e.g., to an art gallery, and it must be possible to show the transaction was completely at arm’s length. Even with vintage cars held with an SMSF, the related party cannot drive it for any reason, even if it is for maintenance purposes or to get restoration work done on the vehicle. When it comes to storage of these type of assets, they must be remote; not located in a trustee’s private residence – that includes the land they own. As such, artwork and vehicles, cannot he displayed in a trustee’s home or stored in a purpose built shed on their property. Records must be kept by trustees showing how the decision was made to store the items. Lastly, the items must be insured by the SMSF and not in a trustee’s individual name or under a business entity they might own. If the SMSF cannot insure the collectibles appropriately so that the asset is secure for members in the future, then the fund must dispose of that asset.
Whilst collectibles are a different asset class to hold within the SMSF and may seem ‘sexy’ when telling friends and other’s you own such an asset, given the limited ability to use or display such an asset, trustees need to consider whether or not holding such an asset is worth all the hassle. At Find Accountant, we provide SMSF tax advice. Our senior accountant is also an award-winning financial advisor. If you require SMSF advice or are considering whether or not to wind up your SMSF, then speak to Warren Strybosch at Find Accountant Pty Ltd.
Warren Strybosch You can call them on 1300 88 38 30 or email info@findaccountant.com.au www.findaccountant.com.au
WARREN STRYBOSCH Find Group The founder of the Find Group of companies draws on his diverse background, which ranges form teaching, to serving in the army, to taxation and accounting, to coach and help clients live their best financial lives. A multi-award winner, Warren’s innovative approach in business means he was a champion of virtual financial advice long before the pandemic. Warren established the Find Foundation, which owns and operates across Victoria.
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