There has been a significant amount of discussion and debate in recent times about the draft regulations introduced for collectable investments within SMSFs to take effect from 1 July 2011.
In more recent times, I have been reading about the concerns of increased costs as a result of changes to collectables being held within SMSFs. How quickly these people forget that the Cooper Panel recommendation was to prohibit the acquisition of collectables and personal use assets.
As part of building “integrity” into the self-managed super fund sector and breaking the shackles of past stigmas, changes to the ability to hold collectibles represents a positive step forward for the industry. Where collectables and personal use assets represent 0.1% of a $430 billion industry, you would think the level of press on these matters meant more than a quarter of all SMSFs were invested in collectables!!!
Whilst concerns of additional compliance costs are valid, they are the reality of the future of SMSFs when it comes to improving the system’s integrity. This is not an area being singled out by the Stronger Super reforms; take for the example the proposed future prohibition of acquiring shares from related parties. The inability to transfer shares in-specie to a SMSF will become a more costly exercise as well. This area is far more prevalent than collectables, yet little has been raised around these proposed changes?
So why are we where we are on this issue of collectables? I refer you back to the “Ten Guiding Principles for SMSFs” developed by the Cooper Review Panel, designed to underpin the regulation of SMSF specifically and more broadly for future policy-making in the SMSF sector.
The recognition of special risks in a SMSF environment (principle 7) and requiring some levels of intervention means that trustees (and their advisers) will need to change how they operate in a new SMSF landscape. These changes are there to uphold strength in retirement policy but where it provides freedom of choice and greater control in making decisions over someone’s own retirement.
The industry has a right to have input in the future direction of superannuation policy within Australia, but I think arguing the toss on collectables is really making a mountain out of a mole hill… be happy that they are here to stay (just with tighter regulation)!!