SPAA queries related party use of collectibles

The Self-Managed Superannuation Fund Professionals’ Association of Australia (SPAA) is seeking clarification from the Government on whether members of self-managed superannuation funds (SMSFs) will be able to display artwork bought within their funds on premises of a related party other than a private residence.

The query follows on from the SPAA welcoming new draft rules dealing with the purchase and holding of collectibles within SMSFs.

SPAA chief executive Andrea Slattery (pictured) said that while the SPAA broadly supported the Government’s new draft rules, it believed they still required some technical amendments and clarifications.

On the specific question of the displaying of artworks, Slattery said that while it was clear the items would not be permitted to be displayed in the private residence of a SMSF member, the position in relation to related party non-residential premises was not so clear.

“If it is the intention to allow such items to be displayed on the premises of a related entity, how will these regulations – and the ban on leasing these items to a related party – interact with the requirement for all fund investments to be on an arms length basis?” she asked.

Slattery said the SPAA was also concerned that the proposed ban on using the items might cause problems if the personal use was incidental and was required for the legitimate maintenance of an asset.

“For example: where a member of a SMSF on occasion drives a vintage car owned by the SMSF and this personal use is considered incidental and is a requirement for the legitimate maintenance of the vehicle,” she said.