Australia Tightens Rules On Investment In Collectables

by Mary Swire, Tax-News.com, Hong Kong

03 February 2011

Self-Managed Superannuation Funds (SMSF) in Australia will continue to be allowed to invest in collectables and personal use assets like artwork or stamps, provided they are held in accordance with tightened legislative standards.

The Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, has released draft legislation that will allow the Government to make regulations about how SMSFs can make, hold and realize investments in collectables and personal use assets.

"I'm pleased to be announcing this draft legislation, which delivers on an election commitment by allowing people with self-managed super funds to continue to invest in art and other personal use assets," Shorten said.

"However, we are tightening the rules, so people can't claim they are, for example, 'collecting' high-end sports cars, paying reduced tax and then actually driving around in those vehicles," he added.

The new rules will ensure these investments do not give rise to a personal benefit for SMSF trustees, but rather are held for the purpose of providing retirement benefits.

Associated draft regulations that set out the rules that will apply to SMSF investments in collectables and personal use assets will be released for public comment following consultation with relevant stakeholders on their design.

This measure forms part of the Australian Government's 'Stronger Super' reform package.

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