SPAA responds to exposure draft on art and collectables

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SPAA supports move to amend the sole purpose test in the SIS Act to allow self managed super funds to invest in art, collectables and personal use assets.

The Self Managed Super Fund Professionals’ Association has today voiced its support for draft legislation released yesterday which will allow self managed super funds to continue to invest in collectables and personal use assets such as artwork and stamps.

The draft legislation will allow the Government to make regulations about how SMSFs can make, hold and realise investments in collectables and personal use assets.

“We recognise the draft legislation as the first concrete step by the Government in keeping its promise to SMSF investors that they continue to be allowed to invest in artwork and collectibles,” said Sharyn Long,
SPAA Chairman.

“The draft legislation amends the Superannuation Industry Supervision Act (SIS) Act so regulations can be made which impose rules on SMSF trustees with regard to collectables and personal use assets.”

“The amendments to Section 62A of the SIS Act will also make clear that it is not a breach of the sole purpose test to have artwork and collectibles in a SMSF portfolio,” Ms Long said.

Originally, the Cooper Review concluded that artwork and collectibles lend themselves to personal enjoyment and current day benefits, so recommended these assets be banned from super funds, which are designed for the sole purpose of retirement benefits. In its response to the Cooper Review, the Government said it would continue to allow investment in artwork and collectibles, but stated that it would make clear rules setting out how SMSFs should hold these assets. In that vein, the Government has stated its support for a SPAA guideline which makes recommendations for holding, valuing and auditing these assets.

“We welcome the transitional arrangements proposed that gives SMSF investors 5 years until July 2016 to dispose of existing artwork or collectibles in their SMSF portfolios, if they are unable to comply with the new rules,” Ms Long said.

“SPAA looks forward to consulting with Government on the content of the new rules and hopes that they include the SPAA Best Practice Guideline for acquiring and holding artworks in a SMSF,” Ms Long said.

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