Some of our SMSF clients invest their super in ‘collectibles’ such as artworks, antiques, artefacts, memorabilia, wine and spirits, jewellery, motor vehicles and more.
Might sound enjoyable, but the ATO has strict rules around storage, usage and insurance to ensure such investments are made for genuine retirement purposes, and not to provide any present-day benefit, including enjoyment. The ATO details those requirements here.
Recently, the ATO has clarified the treatment of diamonds, ruling that “natural diamonds when held in loose form, are not considered collectable… assets and as such do not have specific storage and insurance requirements” (read more here).
The most common question we are asked is about coins. According to the ATO
- “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.”
If you’re investing in bullion and want to avoid any possible issue with the ATO, consider the cast or minted bars rather than coins. Many dealers offer the same or similar weights in each form so it’s easy to get the size you want without a potential ATO headache.
The added benefit is that usually coins are the most expensive bullion form to buy, followed by minted bars, and then cast bars being the least expensive. Why? Less work is required to produce a cast bar than a minted bar, with coins being the most labour intensive to produce.
Something else to keep in mind is that dealers will often buy back all three forms at exactly the same “buy price” based on bullion weight alone. And if someone buys your coin at a higher than spot market price, then it is a ‘collectable.’
