Classic Car in your SMSF

Is a Classic Car allowed as a SMSF Investment?

I received an email the other day which asked.  Are we able to purchase a classic car within our super still?

Classic Cars can be purchased by a Self-managed Superannuation Fund (SMSF) provided they provided they are purchased and held in accordance with the superannuation legislation.

Firstly, they can not be purchased from a related party (see definition below) to the fund, must be made as part of your investment strategy and must be allowed by the fund trust deed.

In addition to the regular investment rules, it falls under the “Collectables and personal use assets rules” which places additional restrictions on the investment.

These include:

• The car must NOT be leased to any related party of the SMSF
• It must NOT be stored or displayed in the private residence of any related party of the SMSF (although it can be stored, but not displayed, in business premises)
• the trustees must record in writing the reasons for the decision on where to store the car, and keep that record for 10 years.
• the trustees must ensure the asset is insured in the name of the fund within 7 days of acquisition
• the classic car can not used by any related party of the SMSF.
• If the Classic Car is Sold or Transferred from the SMSF to a related party of fund, it must be done at a market price determined by a qualified independent valuer.

Arguably, the most important of the above to consider is that the Classic Car can not used by any related party any time.  In no circumstances can it be driven by a related party, not even for maintenance purposes, to show for sale purposes or to have restoration work done.  However, a person who is not a related party could drive the vehicle for such a purpose.

Definition of a "Related Party"

A related party includes:

• all members of your fund
  • the relatives of each member (Relative Means: a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the member or their spouse)
  • the business partners of each member
  • any spouse or child of those business partners
  • any company the member or their associates control or influence
  • any trust the member or their associates control.

• standard employer–sponsors, which are employers who contribute to your super fund for the benefit of a member, under an arrangement between the employer and a trustee of your fund
  • associates of standard employer–sponsors, which include
    • business partners and companies or trusts the employer controls (either alone or with their other associates)
    • companies and trusts that control the employer.

More information

The Australian Taxation Office has a lot of information relating to Self Managed Superannuation Funds. For more information on Collectables and personal use assets - Click Here.