25718 views

0 Members and 1 Guest are viewing this topic.


Offline Fil-Ski


  • Joined: Feb 2009

  • Drives: 993TT
  • Location: Adelaide
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?

In regards to income generating means (rental for gallery display for instance) provided it’s on an arm’s length basis and isn’t in breach of the sole purpose test then it wouldn’t be a problem. 

Some general information on the ATO website under Wine, vintage cars, artworks and super

http://law.ato.gov.au/atolaw/view.htm?docid=DSF/SMSFR2007D1/NAT/ATO/00001
http://www.theaustralian.com.au/business/wealth/collectables-that-break-the-smsf-rules/story-e6frgacf-1111117657294

It can be done and has been done. I no longer work in the field of taxation however you should be able to find a number of advisors that will be able to help you with this.





Offline allanuber


  • Joined: Aug 2007

  • Location: Sydney
  • Name: Al
In regards to income generating means (rental for gallery display for instance) provided it’s on an arm’s length basis and isn’t in breach of the sole purpose test then it wouldn’t be a problem. 

Some general information on the ATO website under Wine, vintage cars, artworks and super

http://law.ato.gov.au/atolaw/view.htm?docid=DSF/SMSFR2007D1/NAT/ATO/00001
http://www.theaustralian.com.au/business/wealth/collectables-that-break-the-smsf-rules/story-e6frgacf-1111117657294

It can be done and has been done. I no longer work in the field of taxation however you should be able to find a number of advisors that will be able to help you with this.




Thanks mate. I have some reading for the airport lounge this evening then.
C'mon, do it!



Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com
Quote
No wine, no ponies: ban on 'exotic assets' in super funds
Tim Blue

EXOTIC cars, stamp collections, racehorses and wine cellars will be banned as allowable assets in self-managed super funds (SMSFs) if recommendations from the Cooper review of superannuation are adopted by the federal government.


Offenders who breach the rules may be obliged to take mandatory education lessons on what is allowable in self-managed funds. The Australian Taxation Office will have a free hand to impose penalties.

Preliminary findings on phase three of the Cooper review released yesterday do, however, allow trustees to choose other investments, while vetoing the use of "collectables" and personal-use assets by trustees. Paintings, jewellery, antiques, stamp collections, wine, exotic cars, golf club memberships and boats are examples cited in the report as collectables and personal-use assets. "The panel accepts that some of these types of assets may appreciate in value over time and investors with the appropriate specialist knowledge can profit out of them," said the report.

"However, the panel points out that people who want to own such assets are free to do so outside the SMSF environment in a way that does not involve special concessions from the tax system."

Arts accountant Tom Lowenstein described the proposals as ridiculous. "The tax office has recognised for years that art can be an investment asset acquired by self-managed funds, provided members do not gain a benefit from it by hanging it on their wall.

"Over the years, art has proven to be a safer and better investment than many others, such as shares."

In releasing the report, Jeremy Cooper said the review urged SMSFs to focus more on investing for retirement savings rather than related party transactions, collectables and leverage.

In welcoming the preliminary findings, the chairwoman of the SMSF Professionals Association of Australia, Sharyn Long said the government should be wary of defining exotic investments. "The practical reality is that very few SMSFs hold these types of investments, and those that do normally have some expertise in relation to them," Ms Long said.

"The introduction of further transitional measures and difficulties associated with what constitutes a collectible or exotic asset will no doubt lead to more legal complexities."

There are more than 410,000 SMSFs in Australia.

http://www.theaustralian.com.au/news/nation/no-wine-no-ponies-ban-on-exotic-assets-in-super-funds/story-e6frg6nf-1225860390616





Offline kmilna


  • Joined: Jun 2012

  • Location:
  • Drives:
Hey..
 As far as i think before getting smsf loan you should know the answer of question that Have you sought expert advice on whether your planned loan complies with all the legal and compliance requirements?



Offline kmilna


  • Joined: Jun 2012

  • Location:
  • Drives:
Hey ..
 Basically an SMSF stands for self managed super funds ... an SMSF loans, just like an SMSF borrowing is a way of financing the purchase of assets for a retirement fund.



Offline kmilna


  • Joined: Jun 2012

  • Location:
  • Drives:
Hmm
Instalment warrant arrangements under superannuation law are lending arrangements that enable an SMSF (or any super fund) to acquire an asset through a series of agreed instalment payments



Offline PA

  • One man comedy gala

  • Joined: Jan 2008

  • Location: www.club-carbon.com
Legal requirements. We just send Mondi around to kill you and rape your women.



Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com
Really, THREE new topics to say something banal about a boring subject...

*merged*

Image





Offline TomE


  • Joined: Aug 2010

  • Location: ADL
AFR article... crosses over to the Whiskey thread!

Quote

http://www.afr.com/news/special-reports/collectibles-losing-their-gleam-for-smsf-trustees-as-new-rules-in-place-from-july-20160321-gnnn2e

Collectibles lose their gleam for SMSF trustees as new rules come into place in July

From July 1, new legislation takes effect that will tighten the rules around collectibles and ensure trustees make investment decisions based solely on their potential to deliver retirement benefits, writes Brendan Swift.

Graeme Colley, the director of education and professional standards at the SMSF Professional's Association of Australia, ...
Graeme Colley, the director of education and professional standards at the SMSF Professional's Association of Australia, says the new requirement that collectibles have to be insured is proving to be the biggest challenge for trustees Louise Kennerley
by Brendan Swift
Turning the many pleasures of retirement – vintage cars, fine art and wine collections – into investments for retirement has been a perk enjoyed by a number of self-managed super fund trustees.

Not any more. From July 1, new legislation takes effect which will tighten the rules around collectibles and ensure trustees make investment decisions based solely on their potential to deliver retirement benefits.

"Even though there were quality assets selected in most funds, there was simply no doubt that people were getting at least some form of pre-retirement benefit out of that," says Ernst & Young executive director and Self-managed Independent Superannuation Funds Association chairman Chris Balalovski.

"People were using it to support some of their hobbies and their weekend passions for vintage motor vehicles and Stratocaster guitars from the 1950s, which they would use and play and derive a lot of pleasure."

 
The value of collectibles has always formed a small proportion of Australia's $590 billion SMSF sector but the stories are colourful. Balalovski says he remembers one investor had a few hundred barrels of whisky in his fund.

"What happens at pension time – how is he going to receive his minimum pension payment? Is it a few millilitres of whisky every now and then?"

BIG DROP IN VALUE

However, the new legislation has prompted a significant turn-around. The value of collectibles has almost halved to about $400 million since the five-year transition period was announced in 2011 following the Cooper review.

"The art market in particular suffered and there was a huge outcry from dealers talking about flooding of the markets with people divesting themselves of artworks including sculptures and photos."

The new laws apply to a wide range of collectibles such as artwork, jewellery, antiques, artefacts, coins, postage stamps and even memberships of sporting or social clubs.

From July 1, collectible assets cannot be stored in the private residence of a related party (such as a member of the SMSF) or leased to a related party (including formal and even informal arrangements where money is not exchanged). However, this means a collectible such as a piece of art can still be stored in a related party's business premises although it probably should not be displayed, as this might deem the asset to have been used before retirement.

The storage method must also be formally documented in writing, including the reasons for the decision, and that information kept for 10 years.

Graeme Colley, the director of education and professional standards at the SMSF Professional's Association of Australia, says the new requirement that collectibles have to be insured is proving the biggest challenge for trustees although most now have their arrangements in order.

"There doesn't seem to be any members wanting to dump things on to the market … they've had five years to get into action," Colley says.

SMSF trustees receiving an account-based pension have greater flexibility to transfer their collectibles out of the fund, according to admin company SuperGuardian. Trustees can complete an in-specie partial commutation of the asset to the member and its value will count towards the members' minimum pension requirements.

While collectibles transferred to a related party must be done at arm's length and at market value, from July 1 a qualified independent valuer will also need to determine that valuation.

PROOF OF BENEFITS

Trustees will also have to think hard about how collectibles fit into their investment strategy, which sets out the SMSF's investment objectives and specifies the types of investments the fund can make. Other considerations include the risk of acquiring the asset, diversification, liquidity and the ability of the fund to meet its ongoing obligations.

Collectibles represent highly specialist territory and investment returns are difficult to predict as a broad asset class.

"A lot of people investing in this space are professionals in that area," says Perpetual Private head of strategic advice Colin Lewis. "Several years ago I knew a fellow who worked with gold bullion and so he was an expert in that space, and gold bullion was in his SMSF."

(Colley says auditors are seeing more SMSF investments in gold ingots, which are stored in a safe, but these are not defined as collectibles, unlike gold coins, medallions or jewellery.)

While collectibles are best left to the experts, Lewis also notes that the five-year transition period from 2011 not only encouraged trustees to sell but also halted much new investment.

"I don't know anybody who has added a collectible to a fund since then," Lewis says, noting that the new laws applied immediately from 2011 for newly acquired collectibles.

Trustees who fail to comply with the new regime face considerable penalties and shouldn't expect any further leeway.

"The tax office has basically said don't come to us on July 1, you've had five years to get your house in order, we're not going to be very lenient in that regard," Lewis says.

Each breach of the new legislation can attract a penalty of $1800 per trustee – although this can be applied multiple times. There are also existing general administrative penalties that can attract fines of up to $10,800 per trustee for each offence.


"There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... "



Offline E7ITE


  • Joined: Jun 2008

  • Location: Perth, WA

So what are the implications for the new owners of Andecorp's old Esprit?



Related Topics

  Subject / Started by Replies Last post
Exotic cars on P or L plates

Started by Kian « 1 2 ... 14 15 » Cars

142 Replies
86947 Views
Last post Wed, 25 May, 2016 - 20:35
by TJB
0 Replies
1340 Views
Last post Mon, 22 Mar, 2010 - 06:42
by trev0006
47 Replies
29607 Views
Last post Sat, 19 Jan, 2013 - 17:04
by Horse
0 Replies
955 Views
Last post Sun, 10 Mar, 2013 - 06:36
by trev0006
13 Replies
5868 Views
Last post Mon, 02 Sep, 2013 - 18:50
by 360c


Latest Discussions

BOARD TOPIC MEMBER POSTED
[ Off Topic ] and today you bought... B2 Yesterday at 23:50
[ Electric Cars ] Beginning of the end for the ICE allanuber Yesterday at 19:21
[ Porsche ] Porsche 991 911 R – Australian Registry NBTBRV8 Yesterday at 19:20
[ Ferrari ] Australian Delivered 308GTB 'glass Horse Yesterday at 15:06