Hot Issues
spacer
SMSFs: Our 'hardest' jobs
spacer
ASIC issues alert over big gaps in SMSF trustee knowledge
spacer
Super savings gap for women stuck at 30%
spacer
Statistics for all Australians
spacer
Super set to play bigger retirement role
spacer
Why SMSFs want estate-planning advice
spacer
The power of financial role models
spacer
Assess your retirement financial resources
spacer
Cryptocurrency audits tipped to increase this EOFY
spacer
Time to check your risk exposure?
spacer
Some general interest stats on SMSFs
spacer
Check trust deed to protect super in estate planning
spacer
Survey reveals strong opposition to retirement system changes
spacer
Australia by numbers – Update
spacer
Federal Budget 2018 – Overview
spacer
Your Budget
spacer
4 components of our 2018 Federal Budget
spacer
Tools to help you manage your financial position are available on our site.
spacer
New rules capture SMSFs trading big with cryptocurrency
spacer
Common EOFY slip-ups flagged for SMSFs
spacer
Beware residency rules if moving overseas
spacer
99 pct of SMSFs missing global opportunities
spacer
How to plan for a better retirement
spacer
Australia by numbers - Update
spacer
Determine your retirement goals
spacer
ATO issues update on cryptocurrency compliance traps
spacer
How likely is a global trade war?
spacer
Gig economy spike prompts calls for super policy changes
Article archive
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
Quarter 2 of, 2016 archive
spacer
Making investing a family affair
spacer
Super and divorce: a personal finance issue
spacer
Market Update - May 2016
spacer
ASIC flags SMSF investors in scam risk
spacer
Older, greyer and still working
spacer
Working and contributing to super past 65
spacer
The pitfalls of part-year pensions
spacer
Replenishing SMSF memberships
spacer
Budget will hit 15% of SMSFs
spacer
The insidious side of low interest rates
spacer
Market Update - April 2016
spacer
Budget 2016-17
spacer
Do investment principles stand test of time?
spacer
Estate Planning - early inheritance
spacer
US economy will bend, not break
spacer
A detailed look at the ATO’s new LRBA guidance
spacer
Defying life's blueprint
spacer
ATO continuing lodgement crackdown
spacer
Another twist on the gender savings gap
spacer
Market Update – March 2016
spacer
Going solo
spacer
Age Pension means-test prevents rational decision-making
spacer
Changing times for super collectables
spacer
Preservation Age Rule
spacer
Why investing for retirement isn't just about super
Changing times for super collectables

The fact that self-managed super funds (SMSFs) can invest in so-called collectables - such as exotic cars, fine paintings and handcrafted pottery - inevitably leads to investment "colour" stories in the media from time to time.

             

Certainly, some SMSF trustees may contemplate diversifying their portfolios by acquiring a Hans Heysen landscape of the Flinders Ranges or maybe a mid-sixties Aston Martin DB5 favoured by James Bond - if only their funds ever have the money.

Yet in practice, only a small percentage of the total assets in self-managed super has ever been invested in collectables. And that percentage has been clearly decreasing over the past four to five years or so, as confirmed by the tax office's Self-managed super fund statistical report - September 2015.

In September 2011, 0.19 per cent or $719 million of total SMSF assets were invested in collectables. And by September 2015 that percentage had fallen to 0.07 per cent or $407 million of the $576 billion then in self-managed super.

The decrease in the SMSF dollars being invested in collectables is largely attributable to amendments to the Superannuation Industry (Supervision) Act introducing strict and specific rules applying to funds investing in these assets. And some self-managed super advisers are now reminding their clients that these rules come into full force from July this year.

As editor Stuart Jones writes in the Thomson Reuters Australian Superannuation Handbook 2015-16, no specific restrictions previously applied to SMSF investments in collectables. The key word here is "specific". The general rules and investment restrictions on SMSFs (significantly, a fund must be maintained to provide retirement, not pre-retirement benefits) have always applied to collectables along with other fund assets.

Under the amendments to superannuation law, artwork and other collectables acquired by an SMSF from July 1, 2011 must not be leased or used by a related party or stored/displayed in a private residence of a related party. (Related parties to an SMSF include their members and members' relatives.)

Further under the specific rules, collectables must be insured in the name of the SMSF and can only be acquired from the SMSF by a related party at market value (based on an independent valuation).

And critically from July 1 this year, these rules will also apply to collectables held by an SMSF before July 2011. In other words, the transitional arrangement for the introduction of the new rules is drawing to a close.

So if you and your fellow SMSF trustees want to keep that long-held Australian colonial painting, valuable piece of Victorian silver or any other type of collectable, have a close read of the rules applying to "exotic" assets. (For an overview of the rules, see the tax office publication Collectables and personal use assets.)

 

By Robin Bowerman
Smart Investing 
Principal & Head of Retail, Vanguard Investments Australia
​26 February 2016