Collectables and personal-use assets rules are changing. Are you ready?
With the end of the financial year fast approaching have you taken action to ensure that any collectables or personal-use assets your SMSF acquired before 1 July 2011 now meet the new rules?
Collectables and personal-use assets include assets such as artwork, jewellery, antiques, vehicles, boats and wine.
If your SMSF acquired any of these assets before 1 July 2011 you have until 1 July 2016 to meet the new rules, which include:
- the asset is not being leased to or used by a related party
- the asset is not being stored or displayed in a private residence of a related party (i.e. a member of the fund or their relative)
- all decisions about their storage must be documented and kept
- the asset is insured in the fund’s name within seven days of its acquisition
- having a qualified independent valuation if they are transferred to a related party.
If you don’t meet the new rules, you will be in breach of the regulations and you may face penalties.
If you are considering transferring these items before 1 July 2016 then they can be transferred to a related party without a qualified independent valuation, but the transaction must be made on arm’s-length terms. This means that the related party must pay a commercial value for the asset.
All transfers to related parties that occur on or after 1 July 2016 must be supported by an independent valuation.
How can we help?
If you need assistance with any aspect of collectable assets that may be owned by your SMSF, please feel free to give us a call to arrange a time to meet so that we can discuss your particular requirements in more detail.