Transition Date for Collectables and Personal Use Assets Ends on 1 July, 2016

The Superannuation Legislation was amended effective 1 July 2011 to impose stricter conditions on personal use assets and other collectables held by self-managed superannuation funds, as follows:

For assets acquired before 1 July 2011, trustees have until 1 July 2016 to make sure they are being kept by the fund in accordance with the rules.

Warning - If by 1 July 2016 the assets do not comply with the regulations, an offence is committed and a strict liability penalty will be imposed of $1,800 per trustee per year – this means that the penalty applies even where the Trustee is unaware that they have breached the requirements.

From 1 July, 2016, regardless of the date of purchase of the asset, the following rules apply:

1. Collectables and personal use assets must not be leased to any related party of the fund.
2. Collectables and personal use assets must not be stored or displayed in the private residence of any related party of the fund.
3. Trustees must make a written record of the reasons for the decisions on where to store the collectables and personal use assets and keep the record for 10 years.
4. Trustees must ensure that collectables and personal use assets are insured in the name of the fund within seven days of acquisition. Please note that for assets that were purchased prior to 1 July 2011 it is no longer acceptable for the collectables to be insured as part of a home and contents policy – there must be separate insurance in the name of the Fund.
5. Collectables and personal use assets cannot be used by any related party of the fund.
6. The transfer of ownership of collectables and personal use assets to a related party of the self-managed super fund must be done at a market price determined by a qualified independent valuer.