Sent: 12-04-2011 09:52:04
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Collectibles and Super Funds
In a recent DIY Super article in The Australian I discussed numismatics - that is, currency collecting in Self Managed Super Funds.
Some Australian Numismatics Dealers Association (ANDA) dealers claim they're clients are averaging a return of over 13% per annum. Not a bad return but one can never be sure what the future will hold.
A reasonable portfolio can be created for as little as $10,000 and it's not a short term investment. It's also very important to factor in time it takes to buy and sell assets in this sector. It seems to be like all relatively illiquid investment classes.
It's an interesting area and one that will continue to gain interest in the SMSF space.
Overall I think it's appropriate that the Government and Opposition rejected the Cooper Review recommendations banning the holding of such investments in SMSFs.
The whole idea behind SMSFs is freedom to invest where the trustees think best.
One point made to me during my research about rare coins was the anonymity. An active collector who owns some rare bank notes and coins in his SMSF said if he left some of his collection in a manila folder near his wallet in a hotel room most people would nick the wallet not realising the contents of the manila folder are worth a lot more.
I hope all these new investments don't end up like aloe vera, alpacas, ostriches, blue gums and so on.
In my view most people seem to find the difference between family trusts and super funds difficult concepts to get their heads around.
For example, family trust governing rules change very infrequently if at all (primarily because changing the rules might trigger a resettlement of the trust and thereby incur CGT).
Conversely in SMSFs(due to a High Court decision) resettlement doesn't occur when the trust deed is changed. In any event super fund trust deeds need to change often - and not only because of Commonwealth super and tax laws.
With family trusts it can be relatively easy to move money into and out of such vehicles (there are tax measure to work through here). Conversely with super funds it's often very difficult to move money into them.
Until these differences are better understood we'll continue to see confusion about what super funds can and cannot do.
Finally please consider purchasing a copy of "A How To Book Of Self Managed Super Funds". You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
The 4th edition was released just before Christmas.
For details of the changes made from version 3 to version 4 visit: http://www.atcbiz.com.au/r.php?r=8mz1024
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
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