SMSFs have long held artwork as part of the trustee’s investment philosophy. However, legislation introduced in 2011, provides stricter rules for trustees to adhere to, when looking to invest in this asset class.
The ATO considers artwork as a collectable and a personal use asset, but as long as the SMSF’s trust deed and investment strategy allow for the asset class, then it can be acquired and held by the SMSF.
Trustees need to also consider how holding artwork will satisfy the sole purpose test for its members. Trustees can not get any current day benefit from the investment.
When artwork is held by a SMSF, the SIS Regulations 1994 (the regulations) state at r13.18AA that:
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Daniel Shaw, CA, B.Com (Acc), SSA® - Guest Contributor
Daniel was recently promoted to Director in July 2021, however has been with DFK Benjamin King Money, since 2012. He started with the firm as a graduate superannuation accountant which has now become his specialist area and prides himself on assisting clients with their annual compliance requirements.