[1q2w3e4r]

I think its largely to do with the type of asset class.  Vehicles aren't classified as assets of appreciating value in the "investment" terms dictated by super since the laws were changed, hence why people aren't buying yachts sitting on the harbour in their SMSF anymore.

Most accountants will advise you if you wish to go down this route for investment purposes to do it outside of SMSF via another entity, this way there is also no taxable component on the sale of the asset when you realise a gain (provided the fund isn't in pension phase or transition to retirement at the time, then there is no tax payable anyway)

[allanuber]

I think its largely to do with the type of asset class.  Vehicles aren't classified as assets of appreciating value in the "investment" terms dictated by super since the laws were changed, hence why people aren't buying yachts sitting on the harbour in their SMSF anymore.

Most accountants will advise you if you wish to go down this route for investment purposes to do it outside of SMSF via another entity, this way there is also no taxable component on the sale of the asset when you realise a gain (provided the fund isn't in pension phase or transition to retirement at the time, then there is no tax payable anyway)

There must be an accountant/wealth manager or other financial advisor that trips over this well ... whethere a SMSF, or another fund that I stick money into isn't a dealbreaker - however being able to pick the appropriate vehicles based on research and knowledge of their value potential and rarity, would be something I'd jump into. I absolutely understand the aim is to provide enough asset/revenue for retirement, but cannot help but think this approach for me at least would be interesting, provide real potential upside and would be better than the mixed funds my super is languishing in now.

[1q2w3e4r]

Yeah I'm not sure, my accountant has several vintage continental cars (20s, 30s) and my understanding from discussing it with him in passing is that he just holds them outside of super.  Outside of super you could do it via any type of trust/investment vehicle or structure I would imagine. 

But I haven't the faintest idea how people (if they) do it in a SMSF, it might make the yearly audit fun.  As you mentioned though, it may largely be to do with the asset allocation of the portfolio, if it was minimal perhaps you could get away with it.   Then you have to work out if its as tax effective compared with just owning outright

[allanuber]

Yeah I'm not sure, my accountant has several vintage continental cars (20s, 30s) and my understanding from discussing it with him in passing is that he just holds them outside of super.  Outside of super you could do it via any type of trust/investment vehicle or structure I would imagine. 

But I haven't the faintest idea how people (if they) do it in a SMSF, it might make the yearly audit fun.  As you mentioned though, it may largely be to do with the asset allocation of the portfolio, if it was minimal perhaps you could get away with it.   Then you have to work out if its as tax effective compared with just owning outright

Good secondary related subject. There's not really any tax benefit in owning outright, and if you do want to claim multiple exotics you own are for work, you need to show they are geared towards being a profitable business. What I look at is the 9% of salary being dumped into a mixed share portfolio that i'm really not that excited about (acknowledging the easiest solution here is to actually build and administer a good, complying SMSF - but this is a car site right!).Say it's 30+ years till I can access that super, and I could use it now to acquire, store and perhaps display (for revenue) rare cars. Only takes a few good picks and in 30 years you have what would seem to be a reasonable investment.

[1q2w3e4r]

Good secondary related subject. There's not really any tax benefit in owning outright, and if you do want to claim multiple exotics you own are for work, you need to show they are geared towards being a profitable business. What I look at is the 9% of salary being dumped into a mixed share portfolio that i'm really not that excited about (acknowledging the easiest solution here is to actually build and administer a good, complying SMSF - but this is a car site right!).Say it's 30+ years till I can access that super, and I could use it now to acquire, store and perhaps display (for revenue) rare cars. Only takes a few good picks and in 30 years you have what would seem to be a reasonable investment.

Hmm.  Interesting, the tax benefit for owning outside super disappears once you put the fund into pension phase or TTR, negating the super tax rate anyway.  I was looking at it from the tax perspective of perhaps wanting to realise a gain on the asset before you were to put the fund into pension phase, therefore making any profit taxable (which it isn't if you own say an F40 personally).  If you were planning a buy and hold strategy without selling anything till retirement then it takes that off the table.

Interesting hypothetical, I'd be curious to see what everyone else thinks or a accountant etc.  If art can be classified as a super investment still (I've no idea) I suppose there is a good argument for collectable vehicles as well.  I imagine people investing in art don't receive income from it, so its capital appreciation they are after, same thing applies here in basic principle.

[3gig4me]

Any collectible is ok - art, coins, cars, wine whatever.  The key to making it happen with relative ease is ensuring that the value of the item is less than 5% of your overall SMSF account balance.  You would need a fairly large SMSF if you wanted a valuable vehicle to be purchased by the fund.

[allanuber]

Any collectible is ok - art, coins, cars, wine whatever.  The key to making it happen with relative ease is ensuring that the value of the item is less than 5% of your overall SMSF account balance.  You would need a fairly large SMSF if you wanted a valuable vehicle to be purchased by the fund.

There's the rub. Less than 5% means it's going to be an epicly sized fund.

[Fil-Ski]

The sole purpose “sole purpose test” of a SMSF is to provide for members retirement benefits.

Nothing is stopping you from owning a classic car in a SMSF. However you’re not allowed to drive them as you will be deriving an indirect benefit from that investment and in breach of the sole purpose test.

[Fil-Ski]

Any collectible is ok - art, coins, cars, wine whatever.  The key to making it happen with relative ease is ensuring that the value of the item is less than 5% of your overall SMSF account balance.  You would need a fairly large SMSF if you wanted a valuable vehicle to be purchased by the fund.

That is not correct. That is the in-house asset rule. You can invest in art,cars etc as long you meet the sole purpose test.

[allanuber]

The sole purpose “sole purpose test” of a SMSF is to provide for members retirement benefits.

Nothing is stopping you from owning a classic car in a SMSF. However you’re not allowed to drive them as you will be deriving an indirect benefit from that investment and in breach of the sole purpose test.

Not driving them is not an issue. Using them for income generating means (rental for gallery display for instance) would help contribute to cover all costs and to also build the investment value.

That being said, we've had a *NO* from our advisors on investing specifically in cars, regardless of my assertions that they are increasing value assets, can be liquidated if necessary, that they are less volatile than many stocks, and that my 'expertise' in the area would be equivalent to if I was picking shares/stocks/other investments.

So. Have you got more details on how this can be done, beyond the broad interpretation of the "sole purpose test" as this on it's own doesn't appear to be enough?