Investing in art in your SMSF
Did you know you can invest in art if you have a Self Managed Super Fund?
This image was used with permission by the artist Betra Fraval and is titled ‘Where the Mountain Meets the Water’ 2020, oil on linen, 91.5 x 81.5 cm.
While self managed super funds afford flexibility with investing, the sole purpose test of any investments held within your SMSF must be met and these assets must provide you with retirement income. For most of us this is when we would be drawing a pension from our fund.
The downside of owning art like this is that it can’t be used for personal use, so you can’t hang it in your lounge room or store it in your house or any related parties, like your parents home. It must also be insured.
Why would you buy art then? Because you love it and want capital growth. A painting probably won’t generate you any income, but over time it should appreciate. Paintings tend to go up in value too when the artist passes away. Although I am no art critic, I also know it’s a good thing when the Australian Government purchases art for the Artbank collection (Est. 1980) as they have with some of Betra Fraval’s work.
How can you or others enjoy art that your SMSF owns? Here are some ideas, you could display it at a gallery or museum, at your office or in a public building.
Once you are retired you could consider withdrawing* it from your SMSF to hang proudly above your dining table.
If you want to speak to a financial planner about investing in art or anything else, please reach out to me. I can’t give you investment advice on art but I can certainly appreciate it and assist with your Self Managed Super Fund questions. It is very important the sole purpose test is met as there are extreme consequences including criminal and civil penalties and increased tax, for non compliance. *There are a few ways to do this so let me help with the most appropriate strategy for you.
General Advice Warning: The information in this post has been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this post, consult a professional financial advisor like myself to consider whether it is suitable and appropriate for you and your personal needs and circumstances