SMSF collectable ins. poses compliance risks.
Collectable assets held within a self-managed super fund (SMSF) are about to cause compliance problems for trustees failing to procure appropriate insurance, one service provider has warned.All new SMSF investments in art and collectables made on or after 1 July 2011 are required to have insurance within seven days of purchase. Where the SMSF held collectables prior to 1 July 2011, the trustee has until 1 July 2016 to comply with the rules."Much of the focus right now is on the transition period to compulsory insurance, with many funds delaying their decision to insure their funds until the last moment," said John Kelly, managing director of Self Super Insurance."We estimate many SMSFs who hold art & collectables don't have insurance for these assets. This means, not only is there likely to be a scramble to find insurance or sell assets as the deadline for new regulatory requirements approaches, it also means they're exposing themselves to risk in the meantime," he said.Kelly reckons a significant proportion of the $660m invested in art & collectable assets is uninsured.This, he said is partially because many SMSFs don't realise their assets are actually not insured by their home and contents policy.As we approach the 1 July 2016 transition deadline there will be a rush to store the assets in an appropriate location, get professional valuations done for those who wish to sell and line up appropriate insurance, Kelly said."If SMSFs leave it to the last minute then they will find themselves in risk of a compliance breach and higher costs," he warned.http://www.financialstandard.com.au/news/view/22562248