From 1 July 2011 the Australian Taxation office changed the rules relating to how a SMSF must manage collectible (antique cars, artwork, wine and alike) assets; Specifically:-
- They cannot be held (even in storage) at a related party premises to the SMSF
- They must be insured within 7 days of purchasing the collectible.
- They cannot be used for any purposes by the member of the SMSF.
The ATO recognised that some funds that held collectible assets prior to 30 June 2011 already had certain arrangements in place. The ATO has allowed a transition period up to 30 June 2016 for those SMSF’s to abide by the new rules. This date is closing in and from 1 July 2016 all collectible assets held by a SMSF will be subject to these new conditions. If the trustees of the SMSF’s cannot abide by these new rules from 1 July 2016 then the collectible asset may have to be sold. Considering the nature of these assets a sale may take some time to negotiate so it is worth considering your action plan. If there is a sentimental value to the collectible, a member can always purchase the asset from the super fund provided an independent valuation for the purpose of the sale is firstly obtained.