SMSF (SELF MANAGED SUPER FUND)
Bayside Bullion offers a full service including buying, selling, storage and annual compliance for SMSF.
Call or drop into our office to discuss directly with one of our friendly consultants
- A Bullion dealer doesn’t create or manage your SMSF, they can only provide access to purchase or sell precious metals.
- A SMSF is permitted to invest in physical precious metals providing the metal is located within Australia.
- An account to purchase and store any Physical Metals must be in the name of SMSF and not in the individual trustee name(s). The bullion dealer will require the SMSF Trust Deed (front and signature page) and identification from each Trustee / Director of the fund.
- Records are to be kept for any purchase / sale during the Financial Year as well as confirmation of the physical metals holdings as of the 30 June for each financial year.
- Minute (record) with fund members on how the bullion purchase conforms to the fund’s investment strategies.
- Metals that are deemed to be collectibles (such as coins) cannot be in personal possession of the SMSF unless stored with a third-party
- Confirm if insurance is provided through the third-party storage. Collectibles (such as coins) must be compulsorily insured by law.
- Provide Evidence of Holding with compliance submission at 30 June annually
Buying Bullion for your SMSF
When buying bullion with your SMSF as opposed to personal, Bayside Bullion will create an account in the name of your fund. To verify its identiy, we will require a copy of the front and signing page of your SMSF Trust Deed and you will have to verify the ID’s (as an individual) of each Trustee/Director. This is only required to be completed during the creation of the account
Why Own Precious Metals within your SMSF?
Precious metals have a long history as a store of value and historically, have a low correlation with the equity markets. These features make precious metals highly useful as both a hedge against inflation, a protector from deflation and a diversification of your SMSF investment portfolio.
Bayside Bullion strongly advises in physical precious metals as it has no liability attached to it. Your SMFS hold’s the allocated title to your gold, silver or platinum investment. This ensures that your ownership remains intact and that your investment is always your funds outright legal property
SMSF Investing in bullion
When an SMSF is considering investing in gold or other precious metals, they need to consider whether the investment could fall within the definition of collectables (such as coins) or bullion assets.
A gold/silver investment could be in gold/silver bullion or gold/silver coins.
Gold/Silver bullion is a recognised weight and fineness of gold/silver that can be purchased for the current price of gold/silver, plus the small percentage costs incurred in refining, fabricating, and shipping the bullion (also known as ‘barring’ or ‘fabrication’ cost). The word “bullion” means a refined and stamped weight of precious metal. Most people think of it as large bricks or bars.
Gold/Silver coins can be found in two different types. Those valued for the bullion amount (i.e. bullion coins) or those with historical value which are often rare, called numismatic coins.
- Bullion coins are valued solely on the precious metal they contain and the demand for the metal. Some bullion products may carry a significantly higher dealer mark-up due to their popularity and higher investor interest. Interest in bullion coins is generally driven by the desire to speculate in precious metals, and to invest in the metal over the long term as a store of wealth.
- Numismatic coins may often have a value greater than that of the precious metals the coins contain. Numismatic coins may also have extra costs embedded into their price due to their rarity, grade, and demand. These coins are mainly for numismatists. A numismatist is someone who does more than simply collect coins. They actively study currency, including coins and paper money, or related items such as tokens and medals. They are particularly interested in the coin’s historical, social and artistic significance. Many people collect these coins due to their strong desire to own something rare and intrinsically valuable with an aesthetically pleasing design that reflects a personal interest. They are mainly purchased by collectors and not investors.
Collectables (eg artworks, jewellery, vehicles, boats, wine) can include coins, medallions and bank notes. The Australian Taxation Office has stated that if coins or banknotes have a value which exceeds their face value, they are treated as collectables. Numismatic coins are treated as collectables. Bullion coins are collectables if their value exceeds their face value and they are traded at a price above the spot price of their metal content.
However, gold bullion is not treated as collectables.
In essence, an SMSF can invest in precious metals as long as it is not acquired from a related party. The key issues to consider when an SMSF buys precious metal bullion bars are:
- The storage and protection of the precious metal assets. It is recommended the assets are stored in a secure place such as a dedicated vault service and not at the SMSF member’s home.
- Insured. The precious metals should be insured in the name of the SMSF.
- The maintenance of the purchase and sales documents of the metal investments.
The Tax Office has issued tighter guidelines in July 2016 for SMSFs investing in collectables. Therefore, where the precious metal assets falls under the definition of collectables, then it cannot be leased to, used by, stored at, or displayed in a private residence of a related party. For more details on collectable , please refer to the following link: