In the past trustees of Self Managed Superannuation Funds purchased art work for the super fund as an investment. You could not purchase this art work for any other reason than investment and certainly not for obtaining the pleasure of looking at it. A Mr Cole offered to look after your art works in his secure warehouse as it was believed that you could not have this at home or in the office. The problem arose when trustees wanted to sell the art work because it could not be found. Mr Cole’s problem was not so much with the police but with the bikie gang that was missing its art works. Thus there arose the conundrum of whether you had to hang paintings at home facing the wall as you can not derive pleasure from your investment.
All new art work which also includes other collectables and personal use assets, and for those in funds at 1st July 2016, must be stored offsite, be separately insured from home contents and must be independently valued. This makes only art works of the million dollar size suitable to be owned by a SMSF.
We have thus suggested that all SMSFs dispose of their art work by 1st July 2016. They can be sold to a member as long as the transaction is at market value. If you have not already done so then please deposit the proceeds of the sale into the bank account of your SMSF.
Aboriginal: artist unknown