Monday, June 20th, 2011
Specialist self-managed superannuation fund (SMSF) education and training provider, The SMSF Academy, says the industry is over-reacting to draft regulations being considered for collectable investments within SMSFs.

“Concerns have been raised around the additional financial burden that will be imposed as a result of changes to collectables held within SMSFs,” says The SMSF Academy’s managing director, Aaron Dunn. “As part of building integrity into the SMSF sector and breaking the shackles of past stigmas, changes to the ability to hold collectables represent a positive step forward for the industry.”

The changes will prevent SMSF trustees from enjoying benefits from their investments in collectables and are designed to ensure the investments are made to derive a retirement benefit. The new rules will apply to a range of lifestyle assets including artwork, jewellery, antiques, wine, cars and recreational boats.

“While concerns about additional compliance costs are valid, they are the reality of the future of SMSFs when it comes to improving the integrity of the system,” Mr Dunn argued, “And trustees and their advisers must be mindful of the fact that it is a better outcome than that proposed by the Cooper Review, which sought a blanket ban on the acquisition of all collectables and personal use assets within SMSFs.”

Mr Dunn said changes to the sector are necessary in order to uphold strength in retirement policy.

“The Cooper Review Panel developed Ten Guiding Principles for SMSFs for a reason: specifically, to underpin the regulation of SMSFs and, more broadly, to provide guidelines for future policy-making in the SMSF sector,” he says. “Principle 7, The recognition of special risks in a SMSF environment and new levels of intervention mean that trustees, their accountants and their advisers will need to change how they operate in a new SMSF landscape.”

Mr Dunn says that the hype around collectables and personal use assets is disproportionate to the amount of money the SMSF sector currently has invested in them. “These assets represent only 0.1% of a $430 billion industry,” he says. “An area of change that will impose greater costs on a greater number of SMSFs is the proposed future prohibition of acquiring shares from related parties – and yet, to date, there has been very little public debate on the topic.

“While the industry has a right to have input in the future direction of superannuation policy within Australia, arguing the toss on collectables is really making a mountain out of a mole hill. Trustees and their advisers should be happy that they are here to stay - albeit with tighter regulation.”

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