What are Art, Collectables and Personal Use Assets?
The rules applying to Art & Collectables held within your SMSF are important to understand, but as a starting point its worth noting that the ATO actually refers to collectables and personal use assets. So, what exactly is a personal use asset?
Superannuation Industry (Supervision) Act 1993 (SIS Act) Regulation 13.18AA (1) specifies the assets that are taken to be collectables and personal use assets as:
artwork (within the meaning of the Income Tax Assessment Act 1997 (ITAA97)). Artwork is defined as a painting, sculpture, drawing, engraving or photograph, a reproduction of such a thing, or property of a similar description or use
jewellery
antiques
artefacts
coins, medallions or bank notes (if their value exceeds their face value)
postage stamps or first day covers
rare folios, manuscripts or books
memorabilia
wine or spirits (includes, but is not limited to, whiskey, gin, vodka, tequila, brandy and rum)
motor vehicles (include, but are not limited to, motor cars and motor cycles)
recreational boats
memberships of sporting or social clubs
What’s not a personal use asset? Turning to the ATO’s guide to what is and isn’t a CGT asset, they define that Assets that are not collectables or personal use assets include:
land
shares in a company
rights and options
leases
units in a unit trust
goodwill
licences
convertible notes
your home (there are certain Exemptions)
contractual rights
foreign currency
any major capital improvement made to certain land or pre-CGT assets
All seems relatively straightforward and yet there are still items that don’t fit the list of the ins’ or outs’. For example, diamonds (stand alone, as opposed to set in jewellery). Are these personal use assets? My advice -if in doubt about whether something is a personal use asset or not then:
a) Get accounting advice from a SMSF expert;
b) Contact the ATO;
c) If in doubt, err on side of caution and treat the item as personal use asset.