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Jason G

Nov 06, 2023

Ownership of Collectables

in SMSF Technical Forum

I am auditing a fund that purchased collectables during the year under audit.

The only evidence is the purchase invoices. The invoices are in the name of the trustees personally and do not mention the SMSF name. There are no official title documents, just purchase invoices.

I have obtained an acknowledgement of trust in relation to these collectables confirming they were acquired using the SMSF's money and acquired for the fund.

No other possible documents exist to show ownership of these collectables.

Is this sufficient evidence to confirm ownership? Or is this a breach of 4.09a re seperation of assets?

Thank you.

1 comment

Comments (1)

THE AUDITORS INSTITUTE

Nov 08, 2023

Hi Jason

You have an ackowledgement of trust but the invoices should have been raised to the Fund.

If all the rules of Regulation 13.18AA are complied with then you may be able to argue there is seperation of assets and no breach of Regulation 4.09A.

SIS Regulation 13.18AA re collectables require:

it not be stored at a private residence of a member,
written record is made as to where it is stored,
member cannot use the collectable,
it is insured within 7 days of purchase in the name of the fund.

It is now rare to see collectables in SMSF's as the rules re regulation 13.18AA are very strict.

The ATO has a good 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.

If other members have a view please let the forum know.

Thanks

The Auditors Institute