Changes to insuring Self Managed Super Funds assets

In 2011, several amendments were made to Australian SMSF regulations that impact how trustees can use, lease, display and insure their investment assets. For all collectible and investment assets held before 1st July 2011, trustee members have until 30th June 2016 to comply with these new regulations. If your clients hold assets such as artwork, antiques, motor vehicles or recreational boats for retirement purposes, they may not be aware that these new regulations take affect from 1 July this year.

Insurance:
If your clients purchased a collectable or personal-use asset for their SMSF, they have until 30 June to insure the asset under the name of the fund. In addition, any assets purchased for an SMSF must now be insured within 7 days of the purchase date. The ATO suggests that your client’s fund assets can be insured under a collective or separate policies but it must be insured under the fund name, not an individual trustees home and contents insurance.

Usage:
SMSF assets or investments cannot provide any current benefits to members or related parties. For example, a motor vehicle asset cannot be driven by members or related parties under any circumstance including maintenance reasons. A third party operator unrelated to members of the fund must handle the vehicle.

Display and Storage:
One of the key changes to SMSF regulation implies changes to the way members can store and display their investment assets. Collectables and valuables are not permitted to be displayed or stored in the private residences of members or related parties*. If the SMSF assets were acquired before July 1st 2011, members have until 30 June 2016 to comply with this regulation. *Assets can be stored, but not displayed, in premises owned by related parties provided it is not a private residence.

Please ensure your Clients arrange the correct insurance cover for their Self Managed Super Funds Assets.

Should you need any assistance in arranging this insurance cover, please contact our office and we can prepare some options for your Client to review.