SMSF members who have invested in gold bullion can store it in their own homes and not breach the collectable provisions of superannuation law, but may still face questions over whether to do so is prudent, according to an SMSF technical expert.
Heffron senior SMSF technical specialist Annie Dawson said the storage of gold in a member’s home was unlikely to breach Superannuation Industry (Supervision) (SIS) provisions if the value of the gold was in line with its market price as a precious metal.
“The question is are the gold bars regarded as collectables and to answer that requires a look at their valuation,” Dawson said during a Heffron technical briefing today.
“The ATO view is that gold bullion could be considered as a collectable, but it has to be in instances where the value of the gold is worth more than the spot price of the metal content because there is something about it that makes it special or a collectable.
“Usually stock-standard gold bars, where there is nothing that makes them special, are not collectables and the long list of SIS regulations which have to be followed when an SMSF holds collectables, including not storing it in the home, do not apply.”
She noted SMSF trustees were still required to act prudently in regard to fund assets and may face questions from the ATO and auditors about the security of the storage of the gold, whether it is separate from personally held bullion and adequate insurance cover.
Heffron client relationship manager Sean Johnston added the home storage of commodity gold was facing greater scrutiny from auditors, who were raising concerns over the existence of the precious metal.
“Auditors have accepted statutory declarations or a photo of the gold with a newspaper, but these are not robust forms of audit evidence,” Johnston said.
“I would not be surprised to see auditors moving to seek more qualifications for commoditised gold stored in places that can’t be independently verified via statements that come from places like a mint.
“If people are going to go big into gold and it is going to be stored in their home, they may have audit issues around proving it exists, and those practical considerations around evidence are becoming more problematic for us from an administration point of view.”
