Hi All, If your SMSF holds PMs, must it also show that these PMs are insured, or is this optional? Also, must the PMs be stored somewhere else other than the member's home or related premises? Depending on the answers to the above, when audit time rolls around, would an auditor be satisfied that the SMSF owns the PMs by merely showing purchase documentation or must the auditor sight the PMs as well? If so, do they have to be sighted where they are stored or can you bring them into the auditors office to show them? Cheers Zargor
Dont take this as the right answer but i think ive read on here that you only have to insure your pm's if they are classed as collectors coins or something. Also they can be stored anywhere but obviously you wouldnt tell them that its stored in your house. Apparently theyll be satisfied with just the documentation to prove you own it but you can tell them to give you x amount of notice beforehand if they wanna see it physically. Ill try find the thread i found it in. http://forums.silverstackers.com/topic-13707-esuperfund-minutes-of-meeting.html - about you telling them about where you store your pm's.
as an example, caveat. which has not been tested yet, the trust are storing their metals at a secure location, the trust maintain a register of all transactions to/from that site i.e one oz in 23/4/1928, 2 oz out 09/04/2033. It's very basic, I have it as an excel file if anyone is interested email me. I mentioned this to our auditor and he was happy with this setup, I even offered a viewing for him if necassary. I think the more clandestine one would make the process, the more likely the auditor would become suspect. Remember the auditor has some serious responsibilities back to the ATO.
If you have to insure PMs, do you also need to insure shares? Shares have a very real risk of company collapse.
Shares are tracked on a register, most bullion is not, nor should it be. You can insure your shares isn't that the point of derivatives ?
My question wasn't whether you can/can't insure shares (obviously you can). Nor was it whether bullion should/shouldn't be on a register (obviously it isn't). My point is there are real risks with any investment, it seems unfair if we were forced to insure bullion, but not other "paper" assets.
You don't have to insure Bullion only coins and collectibles.They have to then be stored off site and insured.Maybe the logic behind the insurance requirement for these collectibles is that they are required to be stored away from the home?
Has anyone with a SMSF weighed up the difference between insuring your SMSF's bullion in a secure onsite location vs a secure offsite location? Silver has more of an potential upside but it's so bulky relative to gold, it's storage costs may be prohibitive. I'd need a BIG expensive safe, not to mention I rent. If I rolled my whole fund into gold, it could fit into a small bank safe deposit box. Preseumably more secure would mean lower insurance (i.e. SMSF operating costs) with the added oppourtunity of getting the bank to include my deposit box contents in their own audits (i.e. get it's existence documented). P.S. I know there is no rule that mentions SMSF bullion must be insured...but I'm being cautious here. EDIT; To correct typo...in last sentence. (see below for results of not checking before submitting )
AFAIK bullion doesn't need to be insured, only coins / section 62A items need to be insured (within 7 days of purchase, blah blah blah)... ref: http://www.comlaw.gov.au/Details/F2011L01360
Sorry guys that was a typo "now rule" should've read "no rule" :/ I was also of the understanding that the coins had to be valued as "collectible" to require insurance. If you don't consider your run of the mill PMint Lunar and Kooks to be collectible, you don't have to insure them as such. But I guess this raises the question... if your bullion coin gains collectible status visavis "Redback spider" what happens if they sell well above bullion price? Is there some penalty i.e. Capital Gains
FYI The Reserve Vault Brisbane can now offer all risks content insurance for items stored. This may be easier than sourcing it yourself and will help to ensure your SMSF follows legislative requirements. http://www.reservevault.com.au/SecureStorage/Insurance.aspx
Hi Kawa, Correct me if I'm reading your reply incorrectly but are you saying it is only collectibles (coins) that a SMSF must store off site & insured; Where as bullion (bars & rounds) can be uninsured and stored on site? Regards Emanance.
Yes..however not sure if the ATO regards rounds as bullion? I would say they would.By the way the auditor needs to view and count your ounces each year.Docs alone don't suffice.
So the auditor will need to see the actual metal right there in front of them? Thanks . By the way I wish I took your advice back in April 2012 after this smack down, you where right.
Yes based on my experience of holding physical in my SMSF away from storage. Not sure how the ATO works with Allocated and Non Allocated storage though.
