SMSFs urged to address compliance issues with collectibles

Speaking to SMSF Adviser, SuperAuditors director Shelley Banton said there are still SMSFs with collectible assets that are just stored at home or that have not been properly insured.

“It’s important to know that these sorts of things had to be finalised by the 1 July 2016. The longer trustees don’t meet these new guidelines, the more risk there is that it will be picked up at the next audit, and there could be a compliance issue for those types of assets when the next audit rocks around,” said Ms Banton.

She noted that while the insurance requirement was previously difficult to meet for certain assets, the ATO has now made this easier by allowing trustees to have the asset covered under a contents policy, as long as it’s in the name of the super fund.

“You don’t necessarily need to have all of the items listed on that contents policy, but the value of the policy has to cover the market value of the assets,” she said.

Ms Banton stressed that the policy does need to be in the name of the super fund with some trustees incorrectly listing collectible assets on the contents policy for themselves.

“This was previously okay as long as you had the super fund listed as an additionally insured, but that’s no longer going to complying,” she said.

“SMSF trustees really need to think about how they’re going to meet those guidelines and, at this point in time, if they think that it’s too onerous to do that then they need to remove that asset out of the fund.”

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>Speaking to SMSF Adviser, SuperAuditors director Shelley Banton said there are still SMSFs with collectible assets that are just stored at home or that have not been properly insured.

“It’s important to know that these sorts of things had to be finalised by the 1 July 2016. The longer trustees don’t meet these new guidelines, the more risk there is that it will be picked up at the next audit, and there could be a compliance issue for those types of assets when the next audit rocks around,” said Ms Banton.

She noted that while the insurance requirement was previously difficult to meet for certain assets, the ATO has now made this easier by allowing trustees to have the asset covered under a contents policy, as long as it’s in the name of the super fund.

“You don’t necessarily need to have all of the items listed on that contents policy, but the value of the policy has to cover the market value of the assets,” she said.

Ms Banton stressed that the policy does need to be in the name of the super fund with some trustees incorrectly listing collectible assets on the contents policy for themselves.

“This was previously okay as long as you had the super fund listed as an additionally insured, but that’s no longer going to complying,” she said.

“SMSF trustees really need to think about how they’re going to meet those guidelines and, at this point in time, if they think that it’s too onerous to do that then they need to remove that asset out of the fund.”

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Miranda Brownlee

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: miranda.brownlee@momentummedia.com.au

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