If a SMSF trades non .999 Precious metals ABCD in a direct exchange with another entity's .999 precious metals,how is this treated specifically by the SMSF and what implications must one take account of? REDBACK
There is no GST with gold bullion, there is however capital gains tax. When you trade this is treated as a sale. Kind Regards non recourse
There is a GST issue here - GST was likely paid on the original purchase. Is there a GST aspect to disposal? I know that as a business there are GST credits available for purchasing non 999 (in general), and GST is chargeable on sale. Does an SMSF have to charge GST on an asset sale if registered for GST?
Yes the Fund is registered for GST purposes I will check my records however some purchases did indeed incur GST. In an 'exchange' how does one determine the 'value' of a CGT event-Spot value?/Independent valuation If some of the assets can be considered Numi or collectable can their value be reduced to Spot legitametly without breaching any Disposal rules. Cheers REDBACK
There is No GST on Bullion purchases including a SMSF purchasing bullion.You need however to be sure that the parties to the transaction are not related parties and are at total "arms length" even if the transcation price is at market value "Spot Price" eg:If your SMSF buys PM from your personal trading company ABC Bullion ( even with separate ABN etc) you have an issue even if the transaction was at a Market Value. Not sure if that was the intention of your question though? So sorry if my comments dont relate directly to your issue.
Check the original post - non 999 - bullion needs to be of a certain minimum fineness and have a recognised mark in order to be exempt from GST.
My advice is that as long as the asset purchase meets the ATO's "sole purpose" test ( ie: to provide for the members retirement) that the class of bullion is not an issue nor is the asset class it is exchanged with as long as the transcation is at "arms length" and meets the "sole purpose" test and has proper basis and proof of a market value.( invoices etc with ABN's etc) You should however consult your accountant for your own situation. I have recently altered my written investment strategy that sits within my SMSF trust deed to allow trade in all forms of PM of all purities.In my case I have listed a % cap of the total fund I would invest in PM thereby documenting to the auditor the changed investment strategy and the ongoing adherence of the fund to the sole purpose test.
Kawa all responses are appreciated. The challenge was {.999}coin traded with Superfunds{.916}coin Q- Can the gold content of both coins be traded at spot equally?,or does each coin need independent valuation and the values worked out to effect a compliant trade? Example- Superfund has{.916} 3 coin set weight 31.1034 grams=[28.4907grams 24ct] swapped for another entity's 28.4907g 24ct gold
Ok if they are coins I think you have GST issues ( for seller and purchaser) as the official ruling from the ATO precludes them from Bullion GST exempt though would allow even 18 ct ( on my reading) to be exchanged with no GST as it is capable of being valued to a proper market price.( eg:esatblished bullion dealers) The respective entities would need I assume to issue invoices to effect a sale and the value would need to be reasonable reflections of market value.The super fund side of the transaction would need a purchase invoice for the 24 ct which would not have GST and would issue an invoice for the coins with GST added.Cheques I suggest would need to be exchanged to have it flow through the SMSF bank statement. This is only my assumption and I think some advice from an accountant in writing would be a must.Particularly if you are going to do more of it. Would be good pice of mind? I can send the tax ruling to you on PM however I cant seem to copy and paste into PM? ( help appreciated?)
