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Anna Han Willetts

Mar 20, 2022

Edited: Mar 20, 2022

in SMSF Technical Forum

Hi,

An SMSF I am auditing purchased gold and silver bullion in FY2021. Referring to Section 62A and REG 13.18AA (see links below), coins and medallions are listed as one of Section 62A items, which Reg 13.18AA applies. http://classic.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s13.18aa.html

http://www5.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s62a.html

a. The item must not be leased to or used by a related party b. The item must not stored at the private residence of a related party c. Decision on storage of item must be documented d. Item must be insured in fund's name within 7 days of purchase

Apart from valuation statement, should a Statutary Declaration to be obtained from the trustee as a audit evidence for the above item a&b above?

Or the bullion coins are not considered as collectables because they are only sold at a spot price, hence Reg 13.18AA do not apply?

Thanks

Anna

1 answer0 replies

Comments (1)

THE AUDITORS INSTITUTE

Mar 20, 2022

Hi Anna

Per the ATO:

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.

"coins, medallions or bank notes

coins and banknotes are collectables if their value exceeds their face value
bullion coins are collectables if their value exceeds their face value and they are traded at a price above the spot price of their metal content".

As a result the bullion coins will not be considered as collectables if they are only traded at the spot metal price and SIS Reg 13.18AA will not apply.