Asset grandfathering queried

Asset grandfathering arrangements with respect to collectibles within self-managed superannuation funds (SMSFs) are being queried by the Self-Managed Super Fund Professionals’ Association of Australia (SPAA).

SPAA chief executive Andrew Slattery said her organisation was seeking the clarification in the context of the Government’s recently released draft rules on collectibles within superannuation funds.

This was on top of the SPAA seeking clarification on whether members of SMSFs would be able to display artworks within non-residential premises of related parties.

“While it is clear that these items will not be permitted to be displayed in the private residence of a SMSF member, the position in relation to a related party’s premises, which is not the private residence of the related party, is not so clear,” she said.

Slattery said her organisation was also seeking clarification on the in-house asset grandfathering provisions and whether or not a lease arrangement with a related party (which was put in place prior to August, 1999) would be subject to the regulations.

She said the SPAA had provided the example of an antique clock which was purchased by a SMSF prior to 11 August, 1999, and had been displayed on the premises of a related company and leased to that related company ever since.

“This asset is exempt from the definition of an in-house asset,” Slattery said. “However, as this asset constitutes a collectible the lease arrangement with the related party would be in contravention of the draft regulations.”