The Australian Financial Review 19-20th September, wrote a fine piece on Impending SMSF rule changes are affecting the art world noting the looming date to get your super art sorted, the deadline approaches!
In essence it said the art purchased in the past within a super fund needs to be stored, or rented to a third party in the future and the deadline to comply is July 2016.
If this is not the case, penalties are most likely to be imposed.
This new ruling removes the grey areas re the art storage and placement as to what trustees must do to comply with the ATO ruling.
So what does it mean? Get the art out of the home and into storage by the deadline, pay a storage fee, access to view and inspection fees and notify your insurance company that the art is located elsewhere.
Make sure it is well stored, as such to avoid moisture, insects, and preferably aired in some way! 2D art, don’t wrap in plastic however use a breathable wrap. For 3D art, I would wrap the artwork in a protective thick bubble plastic outer and a paper inner. Have it photographed prior to storage with a date inscribed on the print, indicating the art was in perfect condition prior to storage! This is always convincing evidence in the event of a storage claim, as your proof of good condition can be substantiated. Additionally have the art showing a label easily sighted at the end or corner of the art and across the face after wrapping!
Regarding the insurance company; as the location of the art has changed it may activate new terms. There could be a premium adjustment! I’m not sure of the storage company’s insurance arrangements or terms so best to qualify any implications or costs involved.
I would also suggest having an art file, or inventory with a complete record of the artwork for your filing. CHG has a simple to use template for the recording of your art! Please contact me if you require a copy, a small fee for the PDF will apply.
The third consideration is to consider selling or trading out of the art from your super fund.
I will write another blog on this subject and identify all that is involved. There are many considerations and you will need to be prepared to make decisions.
Yours in art,
*Any advice given is of general nature only and does not take into consideration your objectives, financial situation or needs. Please consider the appropriateness of the advice and obtain your own independent advice before acting.