Rules for SMSF investment in collectables & personal use assets

Collectables and personal use assets are things like:

• artworks
• jewellery
• vehicles
• boats
• wine.

Investments in such items must be made for genuine retirement purposes, not to provide any present-day benefit.

Collectables and personal use assets can’t be:

• leased to, or part of a lease arrangement with, a related party
• used by a related party
• stored or displayed in a private residence of a related party.

In addition:

• your investment must comply with all other relevant investment restrictions, including the sole purpose test
• the decision on where the item is stored must be documented (for example, in the minutes of a meeting of trustees) and the written record kept
• the item must be insured in the fund’s name within seven days of the fund acquiring it
• if the item is transferred to a related party, this must be at market price as determined by a qualified, independent valuer
• as with all fund assets, check prior to purchase that they are not encumbered in any way (you can use the Australian Financial Security Authority’s Personal Properties Security Register to ensure that collectables and personal use assets have no security interests over them prior to your purchase).

For collectables and personal use assets you held before 1 July 2011 you had until 30 June 2016 to comply with these rules.

If you have any questions, feel free to ask them in the comment section. We will be happy to answer all your queries.