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Kylie Wee

Oct 05, 2022

Artwork investment can be displayed at the investment property of the SMSF?

in SMSF Technical Forum

A Superfund invested in Artwork paintings, and it has been displayed in the residential property investment of the Super Fund. The tenant of the residential property is not a related party. Does the SIS Act permit the trustee members to display the paintings in the Super Fund's investment property?

1 answer0 replies

Comments (1)

THE AUDITORS INSTITUTE

Oct 05, 2022

Hi Kylie

The SIS rules re artwork is in regulation 13.18AA of SIS. This is the regulation re SMSF's - investment in collectable and personal use assets.

Artwork meets the definition of "collectables and personal use assets".

Under the SIS rules artwork owned by a SMSF cannot be stored / kept at a private residence of a related party.

The SIS legislation does allow a Fund to rent artwork to a non related party if it is done on an arm's length / commercial basis.

The ATO has a great summary of the rules at:

www.ato.gov.au

Collectables and personal use assets

If your fund invests in collectables or personal use assets – such as artworks, jewellery, vehicles or boats – related parties aren't allowed to use these assets or store them in their home.

My view is that the artwork could only be displayed in the investment property owned by the SMSF if this is covered by a lease agreement (to an unrelated party) and done on an arm's length / commercial basis.

Thanks

SMSF AAA