SuperConcepts has revealed an analysis, based on 2,450 self-managed super funds (SMSF), which identified the top 10 exotic SMSF assets and why trustees typically invest in those assets.
They were:
- Frozen semen;
- Commercial laser;
- ATMs;
- Commercial washers and dryers;
- Water vending machine;
- Water rights;
- Not your mothers sewing machine;
- Cattle;
- Taxi plate; and
- A beaut Ute
The most common exotic investments were split into two categories: “collectible” or “in-house assets”, with each of them having strict rules around how the assets should be treated.
The study described in-house assets as any assets subject to a loan or lease agreement with a related party or an investment in a related company or trust. SMSFs were not allowed to invest more than five per cent of its total fund assets in this category.
Additionally, some assets were specifically excluded from being an in-house asset, such as commercial property.
On the other hand, collectibles and personal use assets were a broader category that included artwork, jewellery, antiques, artefacts, coins medallions and bank notes, postage stamps and fist day covers, rare folios, manuscripts and books memorabilia, wine or spirits, cars, recreational boats, memberships of sporting or social clubs, and other assets used or kept primarily for person use or enjoyment.
According to the report, this category was characterised as the area where SMSF investment passion was on full display.
Simlarly to the first group, also collectibles are governed by a set of rules which included the following restrictions:
- Asset not leased to a related party;
- Asset not stored in a private residence of a related party;
- Documented decision of asset storage;
- Asset to be insured within seven days of acquisition in the SMSF’s name;
- Asset not used by a related party; and
- If asset disposed of to a related party must occur at market price assessed by a qualified independent valuer
