ATO drills in looming deadline
The ATO has again reiterated that “time is running out” ahead of the approaching deadline for collectables and personal use assets, warning penalties will apply for those who are not compliant.
From 1 July 2011, investments in collectables and personal use assets have been subject to strict rules under regulation 13.18AA of the SISR. Investments held before 1 July 2011 have until 1 July 2016 to comply with the rules.
Under the new rules, there are a series of investment standards that need to be met by the SMSF holding the collectibles, including that the asset cannot be stored in a private residence of a related party. In addition, there must be a documented decision about asset storage.
Most significantly, the collectible must be insured in the fund’s name within seven days of the SMSF acquiring it.
“If you are considering disposing of these items, they can be transferred to a related party without a qualified independent valuation, but only if the transfer takes place before 1 July 2016 and the transaction is made on arm’s length terms,” the ATO said.
“Trustees have had since July 2011 to make arrangements so we expect you will have ensured the requirements are met before the deadline. If this isn't the case, you need to take steps now as there are penalties for breaking the rules,” the ATO added.
Late last month, the ATO’s Kasey Macfarlane stressed that the regulator is unlikely to be sympathetic to those who are non-compliant after deadline, given the five-year transitional period that has been allowed.