“Step one would be to identify where the bullion is essentially stored. There are probably two camps of clients. One camp is those that want to store it somewhere official, like in an independent storage facility.”

If the bullion is stored at an official facility, Mansell said an auditor would be looking for not only a tax invoice to prove the trustee has acquired the bullion and has ownership but also a document from the facility to prove that it exists.

“They’re looking for something like a holding statement, and that might itemise how much the facility is holding and its value,” she said.

“It may also include buyback price or a spot price. If it doesn’t, that’s not the end of the world. Demonstrating from that entity that the bullion exists would tick the box, and you can then just value it yourself using the spot price.”

In regard to proving ownership, she said an invoice would be sufficient.

Mansell continued that the second camp of clients who hold bullion may store it somewhere independently.

“Perhaps they’re storing it at home or at a bank, and that’s a different kettle of fish,” she said.

“Again, the auditor is going to want to see proof of existence, ownership and valuation and something to prove that the trustee bought it.”

Again, a tax invoice or purchase document is suitable for ownership and purchase requirements, but trustees will also have to provide a statement confirming where the bullion is being stored, the amount that is being stored, and some sort of identification numbers, like a serial number.

“The auditor is probably not going to necessarily ask for the precise address or location of where it’s being stored because that might be a bit of a breach of privacy or a security concern,” Mansell said.

“What they’re also likely going to want to see is some sort of holding or existence evidence at 30 June. What we’re seeing nowadays [is that] most auditors that we deal with are happy with a date-stamped photo on 30 June, or a photo with the bullion with something with a date on it, like a newspaper with the 30 June date on it.”

She said as bullion itself isn’t a collectible, trustees don’t have to go through the collectible rules as required under the Superannuation Industry (Supervision) Act (SIS Act) and, therefore, don’t have to have it insured in the trustee’s name, within seven days of acquiring it.

“But I guess the question would then be, would a normal, prudent trustee insure something like gold or silver? Perhaps, if it was a big chunk of the fund, they might,” she said.