Coins, art, jewellery, antiques, vehicles, boats and wine and spirits come under the classification of collectables and personal use assets. Given the volatility in equity markets it seems like a great investment option for self-managed super funds (SMSF) but keep in mind there are very strict rules. These rules were designed in mind with the purpose of superannuation, which is to provide for a members retirement and not for present day benefits. The main restrictions are rules designed to deter related parties (relatives of the individual or partnership, trusts or company’s controlled by these parties) from gaining any personal enjoyment from the asset.
· Items must not be stored i
· Items cannot be used or leased to a related party. Displaying an asset such as art is considered use.
· Decisions on storage must be documented. The SMSF must record in writing reasons for storing the asset.
· Assets must be insured in the SMSF name and not under the members household insurance policy.
· Independent valuation of assets. When transferred to a related party value must be determined by a qualified independent valuer.
Penalties are up to $1,100 for each breach.
That’s no fun but that’s the point. Superannuation law is setup to encourage future not present benefits, the main goal of investing. In a low returning environment collectables are a perfectly legitimate asset class and as long as the assets are not to be used in anyway by a related party collectables can be a nice form a diversification for SMSF
n the private residence of a related party.
Silver or gold bullion coins are good for super funds as purchase is just above spot price compared to proof coins which are numismatic
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