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PKF Australia

Accountants and Business Advisers

ATO tightens SMSF guidelines on personal use assets

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Tom Hackett

Partner

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ATO tightens SMSF guidelines on personal use assets

Background

As part of its campaign to ensure Self Managed Superannuation Fund (SMSF) investments are at arms-length, the ATO is tightening eligibility guidelines.

Collectibles and personal use assets

Collectables and personal use assets include such items as art, jewellery, coins, antiques, boats and wine. To be eligible investments for a SMSF, you must prove they are purchased to generate income for retirement purposes. For example, a painting hanging in your living room is considered a personal use asset and cannot be held in a superannuation fund.

However, the ATO will allow collectibles to be held inside a superannuation fund, provided that the following strict conditions are met:

  • Your investment must comply with the sole purpose test - the purpose of the investment must be to fund your retirement
  • The decision on where the item is stored must be documented and a written record kept
  • The item must be insured in the fund’s name within 7 days of acquiring it
  • If the item is transferred to a related party, this must be at market price as determined by a qualified, independent valuer.

Trustees have until 30 June 2016 to comply with these new rules otherwise the assets must be removed from the fund before 1 July 2016.

What do you need to do?

Please review the investments in your SMSF or contact us to do that for you.

If your investments meet the ATO guidelines, don’t forget that they now need to be valued at the end of each financial year.

 


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