Imminent deadline for SMSF collectables
Butlers Taxation and Business Advisors
Are you still storing those pre 1 July 2011 Self-Managed Superannuation Fund collectables and personal use assets in your own home? Have you properly insured these assets or plan to have them valued by a qualified, independent valuer in the upcoming financial year? If your answer is no to any of these questions, time is quickly ticking down for you to make other arrangements for these assets before you find yourself with compliance problems from the Australian Taxation Office.
Collectables and personal use assets purchased by SMSFs prior to 1 July 2011 were granted a transitional period until 1 July 2016 to comply with the new rules under the Superannuation Industry (Supervision) Act 1993. From this date, any collectables or personal use assets held under any SMSF:
• cannot be leased, used, displayed or stored by a related party
• must be properly insured in the fund’s name
• must be valued at market value by an independent valuer
• a decision made on where the asset is stored and written documentation kept for 10 years.
Yes, gone are the days when you could have your SMSF own a beautiful piece of artwork and have it amaze your guests by displaying it throughout your family home, and you definitely won’t be able to impress your companions with the roaring engine from your SMSF’s high performance car that is usually stored in your garage.
Collectables and personal use assets, as defined in regulation 13.18AA of the Superannuation Industry (Supervision) Regulations 1994, include: artwork, jewellery, antiques, artefacts, coins, medallions or bank notes, postage stamps or first day covers, rare folios, manuscripts or books, memorabilia, wine or spirits, motor vehicles, recreational boats and memberships of sporting or social clubs. This means you can no longer excite your dinner party with the good looking wine labels you have stored in the cellar.
These rules have been in place for nearly five years, and this means the ATO has given trustees ample time to comply with the new rules and make arrangements for their SMSF collectables and personal use assets. The ATO has previously warned late last year that penalties will apply to those who are not compliant, and it is unlikely the ATO will be lenient.
Good news is if you do not want to comply with the new regulations, you can dispose of any pre 1 July 2011 collectables and personal use assets to a related party prior to 1 July 2016 without obtaining a market valuation from a qualified, independent valuer, but you better be quick! The deadline is only a few months away.
For further information, contact Jamie Arrington at Butlers Taxation and Business Advisors on (02) 4929 7002 or email firstname.lastname@example.org.