SMSF - Arms length transactions of Bullion
- Thread starter SilverSanchez
- Start date
SilverSanchez said:
Correct, the owner is the Australian Federal Government, because you cannot touch it without their permission or according to their rules. Rules that they can change at any time, for any reason. Such as if they decide welfare payments to those aboriginals that moved in next door to you are more important than that new boat you had your eye on. But they would never go that far would they?
hiho said:
No? It was just the first thing that came to mind. Do you have a hang up with people using the word aboriginal? If you like I could edit it to say Bogan. That would imply people of Anglo descent. Speaking about people of Anglo decent rarely causes problems. You choose. Shall I edit the post?
just back to the original question there... in the case of purchasing from a person rather than a business, it is possible to simply withdraw the cash from your super bank account, pay the person, get a receipt (with name and address - no abn though) and then store said purchase appropriately, store the receipt in your super records and go about your business?
Or is it suggested not to withdraw cash from the super fund and only do bank transfers?
Or is it suggested not to withdraw cash from the super fund and only do bank transfers?
ShinyStuff
New Member
DSK said:
Receipts for the cash amount will be fine.
There is a very detailed ATO ruling on Bullion Purchases in a SMSF.In short.
1)Better to buy from a "recognized dealer" ( ruling is quite ambit on what that is and very open to interpretation)
2)Always buy off invoice were seller provides full address and ABN and have your full purchase details in the name of your SMSF.
3)Have your written documented investment strategy document as required under your trust deed clearly indicate that bullion purchase is "part" of your strategy for your SMSF.NOTE.When you document your investment strategy the over riding principle is the "sole purpose" test of the fund providing for your retirement.
A 100% bullion strategy may seriously test the "sole purpose" test though.Be careful with this.
4)Only Silver,Gold and Platinim purchases are GST free so if you intend on buying say Palladium your SMSF must be registered for GST if it is to claim the GST back.That will involve more accounting fees.
5)Must buy at Market value and arms lenght.So record Spot prices at date of purchase just to have the record on file.If buying premium bars download internet prices from websites on the day and date and save.
6)You can't buy coins in a SMSF according to the Ruling .
Hope that helps.
1)Better to buy from a "recognized dealer" ( ruling is quite ambit on what that is and very open to interpretation)
2)Always buy off invoice were seller provides full address and ABN and have your full purchase details in the name of your SMSF.
3)Have your written documented investment strategy document as required under your trust deed clearly indicate that bullion purchase is "part" of your strategy for your SMSF.NOTE.When you document your investment strategy the over riding principle is the "sole purpose" test of the fund providing for your retirement.
A 100% bullion strategy may seriously test the "sole purpose" test though.Be careful with this.
4)Only Silver,Gold and Platinim purchases are GST free so if you intend on buying say Palladium your SMSF must be registered for GST if it is to claim the GST back.That will involve more accounting fees.
5)Must buy at Market value and arms lenght.So record Spot prices at date of purchase just to have the record on file.If buying premium bars download internet prices from websites on the day and date and save.
6)You can't buy coins in a SMSF according to the Ruling .
Hope that helps.
ShinyStuff
New Member
Kawa said:
You are wrong.... so long as they are part of the investment strategy and clearly outlined it is okay. Unless you want to correct me! BUT I have 1kg silver coins (along with silver bullion bars) and I have passed audit and have big tick from ATO.
That was my understanding, which is why I asked for the link, so I could read it myselfShinyStuff said:Kawa said:
You are wrong.... so long as they are part of the investment strategy and clearly outlined it is okay. Unless you want to correct me! BUT I have 1kg silver coins (along with silver bullion bars) and I have passed audit and have big tick from ATO.
cowwws
Member
Kawa said:
I recall reading a Ruling (which of course I can't find now), which I think was the same ATO ruling, which did indeed say you couldn't hold coins in your SMSF (or have artwork hanging at your house, or buy vintage cars, or wear or otherwise enjoy jewelry , etc), unless they were bullion coins, ie. 99.9 - Which made me happy at the time, since I have a few nice coins in my SMSF too...
I'll have a look around for the link.
ShinyStuff said:Kawa said:
You are wrong.... so long as they are part of the investment strategy and clearly outlined it is okay. Unless you want to correct me! BUT I have 1kg silver coins (along with silver bullion bars) and I have passed audit and have big tick from ATO.
You may want to read this closely
http://www.ato.gov.au/superfunds/PrintFriendly.aspx?ms=superfunds&doc=/content/00301181.htm
Scroll to the end of the document.This is not the general bullion ruling I was referring to above rather than a current ATO Q and A on various items including "bullion coins".
It is very clear the purchase of bullion coins is currently a problem in a SMSF.If you hold them now it appears you have a transitionary period to deal with them untill 2016.
cowwws
Member
Kawa said:
Not trying to be a smartarse, but what specifically are you referring to? I have just read through "13.18AA Self managed superannuation funds investment in collectables and personal use assets" here http://www.comlaw.gov.au/Details/F2011L01360 but it really only mentions the records you need to keep, if you do purchase a section 62A item, where you can't store the items, that you must record your decisions about where you will store them, that you must insure the items within 7 days in the name of the fund, that you dispose of the items at market price, all so you (or any related party) don't experience any "current day enjoyment" or benefit from the item.
Summary here: http://www.comlaw.gov.au/Details/F2011L01360/Explanatory Statement/Text
Happy to be corrected though, as I am currently enjoying a glass of wine.
I will try and find the original ATO ruling that precludes coins and post up.When you read this in conjunction with the above it is grey IMO.
The ATO bullion ruling says basically you are Ok with bullion however collectors coins are out(eg.1966 50 cents would not be Ok for eg).
The real test in the ruling is the ability to link the asset directly to a recognized spot price.
This latest ruling goes one step further and says that bullion coins that have a price above spot become personal collectables and subject to Regulation 13.18AA (1).
I personally find it confusing.
So my read is that coins that aren't bullion grade are definately out and those that are bullion grade that have a ready spot price reference and traded as such are OK and not subject to Regulation 13.18AA(1).
Those that trade beyond spot are caught by the regulation.
This is just my read on it.
It's grey enough for me to not delve into coin investment in a SMSF when bullion bars are way simpler IMO.
The ATO bullion ruling says basically you are Ok with bullion however collectors coins are out(eg.1966 50 cents would not be Ok for eg).
The real test in the ruling is the ability to link the asset directly to a recognized spot price.
This latest ruling goes one step further and says that bullion coins that have a price above spot become personal collectables and subject to Regulation 13.18AA (1).
I personally find it confusing.
So my read is that coins that aren't bullion grade are definately out and those that are bullion grade that have a ready spot price reference and traded as such are OK and not subject to Regulation 13.18AA(1).
Those that trade beyond spot are caught by the regulation.
This is just my read on it.
It's grey enough for me to not delve into coin investment in a SMSF when bullion bars are way simpler IMO.
$200 are currently being sold by wdavis for $497 based on a SPOT of $1590.94
SPOT Value of a $200 coin (adjusted for GST) is 0.2948 x SPOT +10% = $515
Therefore it is clear that $200 coins trade BELOW spot.
So this is clearly NOT a collectors coin. There is no problem with your SMSF having GST attributable items in it either.
(Case Closed)
SPOT Value of a $200 coin (adjusted for GST) is 0.2948 x SPOT +10% = $515
Therefore it is clear that $200 coins trade BELOW spot.
So this is clearly NOT a collectors coin. There is no problem with your SMSF having GST attributable items in it either.
(Case Closed)