In a submission to the Government’s draft regulations on collectibles and personal use assets in self-managed super funds (SMSFs), an industry association has asked for even further tightening of the rules in the interests of all super fund members.
The Australian Institute of Superannuation Trustees (AIST) particularly wished to see assets that were similar to those commonly accepted, but not included in the list, brought under regulation by a ‘capture-all’ subsection that had been left out of draft regulations.
The association also said there were still loopholes in the legislation that it would like to see closed, including the ban on leases to related parties.
In its submission the association wrote that the regulations did not go far enough, and that it would like to see further bans on sub-leases to prevent related parties getting around the legislation.
“Furthermore, we believe that even if these assets were being sub-let legitimately to non-related parties, such a ban would assist in the prevention of loss, theft or damage,” the submission said.
The AIST also suggested the ban on the storage of items by a related party was too prescriptive. It said that rather than using the term ‘private residence’, it should be substituted with ‘any premises owned by’ to prevent circumvention of the legislation.
Furthermore, the AIST said it strongly supported the proposal requiring items to be insured. However, it felt it unfair to suggest that trustees should be liable in the instance where, through no fault of their own, they are unable to insure in the given timeframe of seven days.
It said trustees should not be blamed for delays in processing by brokers, underwriters or third parties and should only be penalised if an application had not been made in the timeframe.
