Government releases new rules for SMSF collectibles

The new rules for self-managed superannuation funds (SMSFs) investing in collectables and personal-use assets have been revealed by the Government.

The Minister for Financial Services and Superannuation, Bill Shorten, has released draft regulations outlining tightening rules around how collectables are stored and valued.

Changes include new rules prohibiting the leasing of assets to related parties, the use of assets by related parties or the storage of collectables in the private residences of related parties.

There must also be a written record of the reason for the storage of an item in a particular location, which must be kept for at least 10 years.

Items must also be insured in a fund’s name within a week of acquiring the item, while the transfer of assets to a related party now requires independent valuation.

The rules are set to commence on 1 July 2011 for all new assets, with a transitionary period applying to existing assets in place until 1 July 2016.

Shorten said the regulations would allow SMSF trustees to continue to invest in collectables in the wake of the Super System Review recommendation that these investments should be prohibited due to the risk investments would be made for current-day benefits.

“The new rules will ensure that these investments are genuinely made for retirement income purposes and not for trustees’ personal enjoyment,” Shorten said.

Written submissions on the draft regulations close on 14 June, 2011.