top of page
HL_white_back.png

Investing in Wine, Artwork, and Memorabilia with Your SMSF

Investing in collectibles and personal-use assets, such as wine, artwork, and memorabilia, can be an appealing way to diversify your Self-Managed Super Fund (SMSF).

 

However, these investments come with strict rules under superannuation laws, and trustees must ensure compliance to avoid penalties.

At HelloLedger, we assist SMSF trustees in managing compliance, record-keeping, and reporting requirements for collectibles and personal-use assets, ensuring your fund meets ATO obligations.

Aboriginal Style Dot Painting
Mask group.jpg
HelloLedger_Background.png

Can an SMSF Invest in Collectibles and Personal-Use Assets?

Yes, an SMSF can invest in wine, artwork, and memorabilia, but these assets must:

  • Satisfy the Sole Purpose Test—providing retirement benefits only.

  • Be stored securely and separately from personal-use assets.

  • Be valued regularly and insured within 7 days of purchase.

Key Compliance Rules for Collectibles and Personal-Use Assets

Precious metals like gold and silver are popular SMSF investments due to their tangible value and ability to act as a hedge against inflation.

1. Sole Purpose Test
All investments must meet the Sole Purpose Test, meaning they must provide retirement benefits and cannot be used for personal enjoyment or display.
 

2. Storage and Insurance Requirements

  • Items must be stored in a secure location, such as a vault, storage facility, or gallery, not at a trustee’s home.

  • Investments must be insured in the name of the SMSF within 7 days of purchase.

  • The fund must be the owner and beneficiary of the policy.
     

3. Valuation Requirements

  • Assets must be independently valued at market rates for financial reporting and audits each year.

  • Trustees must maintain purchase records and appraisal documentation.
     

4. Prohibited Use or Display

  • Collectibles cannot be used by trustees or fund members, even temporarily.

  • Artwork cannot be displayed in a trustee’s home, and wine cannot be consumed by members.
     

5. Disposal and Sales

  • If sold, collectibles must be sold at market value, with independent valuations to confirm compliance.

  • Transactions must be properly documented to avoid breaches of superannuation rules.

Mask group.jpg
A joyful mature couple laughing together with financial documents and a laptop on the table
HelloLedger_Background.png

Advantages of Investing in Collectibles and Memorabilia

  • Diversification:
    Offers an alternative to traditional asset classes such as shares and property.
     

  • Potential Capital Growth:
    Unique items like artwork or rare wines can appreciate significantly in value over time.
     

  • Tangible Investments:
    Physical assets often appeal to trustees looking for non-financial assets in their portfolios

Risks and Considerations

  • Storage and Insurance Costs:
    Maintaining secure storage and insurance can increase the costs of holding collectibles.
     

  • Illiquidity:
    Collectibles may take time to sell, making it harder to liquidate assets quickly for pension payments or expenses.
     

  • Strict Compliance Rules:
    Failure to meet storage, valuation, or usage restrictions can result in penalties and the fund being declared non-compliant.
     

  • Market Volatility:
    Values can fluctuate, especially for niche collectibles, making price predictions uncertain.
     

Definition of Collectables and Personal Use Assets

Collectables and personal use assets are:

  1. artwork – including paintings, sculptures, drawings, 
    engravings and photographs  

  2. jewellery

  3. antiques

  4. artefacts

  5. coins, medallions or bank notes  
    - coins and banknotes are collectables if their value exceeds their face value
    - bullion coins are collectables if their value exceeds their face value and they are traded at a price above the spot price of their metal content

  6. postage stamps or first-day covers

  7. rare folios, manuscripts or books

  8. memorabilia

  9. wine or spirits

  10. motor vehicles and motorcycles

  11. recreational boats

  12. memberships of sporting or social clubs.

Group 116 copy 2.jpg
HL_white_back.png

Investing in Wine, Artwork, and Memorabilia with an SMSF FAQs

  • Can I display artwork owned by my SMSF in my home or office?

  • No, artwork owned by an SMSF cannot be displayed in a trustee’s home or workplace, as this would breach the Sole Purpose Test.

  • Can I purchase collectibles from a related party?

     

  • No, SMSFs are not allowed to purchase collectibles from related parties under superannuation laws.

What happens if I use a collectible owned by my SMSF?

Using or displaying SMSF-owned collectibles for personal purposes breaches superannuation laws, resulting in penalties and potential loss of concessional tax benefits.

What happens if a collectible is stolen or damaged?

Collectibles must be insured, and trustees must keep insurance policies and claim records to demonstrate compliance during audits.

  • Does wine stored in my SMSF need to be insured?

  • Yes, wine and all collectibles must be insured in the name of the SMSF within 7 days of purchase to comply with ATO rules.

How do I value collectibles like artwork and memorabilia?

You must obtain independent valuations at market rates each year for reporting and audit purposes.

  • Can SMSFs sell collectibles to related parties?

  •  

  • Yes, but only at market value, and the sale must be independently verified to ensure compliance with arm’s length rules.

Can HelloLedger assist with compliance for SMSF collectibles?

Yes, HelloLedger provides:

  • Compliance checks for collectibles and memorabilia.

  • Assistance with documentation, valuations, and audit preparation.

  • Support with insurance arrangements and record-keeping.

Get in Touch

Ready to take control of your retirement savings with a Self Managed Super Fund?  

Contact HelloLedger today for expert SMSF services. Together, we’ll pave the way for a secure and prosperous retirement. Say Hello to strategic superannuation management and Goodbye to worry!

bottom of page