An art investment can be an attractive alternative to owning more popular assets like shares and popular, but it’s difficult to justify in self-managed superannuation.
Super rules state that investments in collectables and personal use assets such as art, jewellery, and wine cannot provide a present day benefit to the fund member or related parties.
Basically this means you can’t use your superannuation money to buy art for the purposes of showing them off in your own home!
Often, this is the deal breaker.
Superannuation investments regardless of whether they are art, fine wine, property, securities, cash, or some other instrument must be managed for the best interests of the fund members, in accordance with the law and kept separate from all other investments of the members.
Here’s a check list for deciding whether to invest in art or collectibles:
1. You cannot see a better investment return elsewhere
2. The object is so rare or so valuable that its capital value will beat the long term returns of shares or bonds
3. You simply must have the object and will buy it from your self managed superannuation fund at market price in a few years when you can afford it and hang it on your wall, above the mantel.
Regardless of an investor’s love of art or collectibles, such an investment in a superannuation structure is difficult to justify if your motives aren’t in sync with the rules.
