SMSF compliance and insurance
Changes to the management of assets in relation to self managed superannuation fund’s (SMSF) have been announced.
The new rules relate to insurance and the importance of having the right policy for fund assets. The regulations require all collectables to be insured in the name of the SMSF within seven days of acquisition. One of the consequences of not adequately insuring the assets is that the fund may lose its complying status.
The key items in these changes are the collectibles listed under the SMSF policy. These assets include jewellery, antiques, artefacts, coins, medallions and more.
The items must be listed in the policy in the name of the fund, which has an insurable interest. These items cannot be listed under any other insurance policy. The SMSF must be the beneficiary of any accident or damage that the listed items may encounter, and the subsequent payout.
A separate policy for each item is not necessary, a ‘group’ policy can cover all the assets, provided they are clearly identifiable as fund assets.
The rules apply immediately, although a transitional arrangement is in place for assets that were owned prior to 1 July 2012. Each fund has until 1 July 2016 to implement a policy for all items. Having the appropriate insurance in place for valuable items is a must for any collector of valuables.