Your SMSF can invest in Art and Collectables under the Superannuation regulations. However, there a set of rules that an SMSF Trustee must follow .
The investment in art or collectables must meet the funds Investment Strategy and sole purpose test. Talk to us if you are considering this type of investment as it needs to be done correctly.
When you acquire your new painting you have seven days to ensure it is insured.
Your Fund may insure several items of Art as one policy in the name of the Fund.
The SMSF regulations prohibit you from displaying your art for enjoyment in your home or business. Basically, the premise behind this by the regulators, is an investment in an Art or a Collectible must grow your wealth. It is not for your enjoyment!
The regulations don’t allow for Artworks or collectables to be used by related parties. This means you cant hang your Picasso in your hallway at the office. Nor can your office rent it from your SMSF. This regulation extends to renting it by your extended family, clients and employees
Where should I store my SMSF owned Art?
So where can I store my art owned by the SMSF? You can store your art in a special purpose-built storage facility . That storage unit should be from your private residence.
Once you have decided where to store your SMSF Art you need to keep evidence about storage. Please keep evidence on how and where the SMSF artwork is stored.
The ATO recommends the best place to store or display your SMSF Artwork would be in a public gallery. Dont forget to have your Artwork appropriately insured.
The art gallery you chose should independant . The gallery where the art is stored should be independant. It cannot be owned or operated by a related party when storing your SMSF Art.
SMSF wine – take good care of it
The Fund acquires a wine collection such as a 1970’s grange heritage . Sadly from 1st July 2011, the SMSF regulations prohibit storing your wine at your private residence. Clearly, too many Trustees were accidentally getting into the Funds plonk at a dinner party with friends. The ATO took the right approach to ensure a Funds Investment does not evaporate!
Editors note – a good wine is there for drinking ! Who would buy a 1970’s bottle of wine and how good would it be?
Your Fund can acquire a vintage car as an investment. You as Trustee cannot drive the car. However, a non-related party can drive the vehicle if needed to do so for repairs etc
Since June 2011 these regulations have made it more involved to buy and sell these types of Assets by the SMSF.
If you are keen for your Fund to acquire these types of assets, make sure your investment strategy by the Fund is reviewed carefully.
Considering an SMSF then read our blog post https://www.gartlyadvisory.com.au/setting-up-an-smsf/