SPAA welcomes art investing for SMSFs
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The Self-Managed Super Fund Professionals’ Association of Australia (SPAA) has welcomed the Federal Government’s endorsement of a SPAA/Australian Artists Association art investing guideline as the broad approach for future collectables investment in self-managed superannuation funds (SMSFs).
If re-elected, the Labor Government has said it would allow SMSFs to continue investing in collectables, including artwork.
According to the new guidelines, the investment must be permitted by the fund’s governing rules and valued annually by an appropriately qualified valuer.
From 1 July, 2011, collectables and personal-use assets owned by SMSFs must be stored according to new rules, to prevent them to giving rise to a personal benefit.
It also means SMSFs wouldn’t have to relinquish existing investments in collectables (as had been recommended by the Cooper Review).
The guideline was the SPAA and the art industry’s response to an early Cooper Panel recommendation that SMSFs be banned from investing in ‘exotic assets’, such as collectibles.
The final Cooper report recommended a ban on collectibles in SMSFs, and proposed a five-year transition period to dispose of existing collectables and personal-use assets.
The SPAA chief, Andrea Slattery, said the Government’s announcement would provide certainty to SMSF investors, as well as the art industry.
“We strongly believe collectables, including artwork, are a suitable investment option for many SMSF trustees, and that SMSF trustees should be able to continue to choose these investments for their funds if they deem them appropriate,” said Slattery.
“Industry adoption of the SPAA/Australian Artists Association guideline on artwork in SMSFs will clarify trustee and auditor obligations by setting a standard for effective storage, documentation and valuation of collectable in SMSFs,” she added.
Slattery also highlighted that very few SMSFs held artworks or other collectables, and those that did normally had some expertise in relation to that particular investment class.
The guideline will be modified to apply across all collectibles, not just artworks.
AUTHOR
Milana Pokrajac
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