Rare Coloured Diamonds are allowable investments inside an SMSF Portfolio and offer many benefits to Trustees putting together a robust and truly diversified portfolio.
The SMSF sector has grown substantially in recent years, with more than a million funds now collectively controlling over $600 billion in assets. Much of this growth has been driven by trustees seeking greater transparency, lower management costs, and the ability to access asset classes often overlooked by traditional superannuation funds.
While property, equities, and term deposits remain the dominant asset classes, SMSFs also allow for investment in alternatives such as rare coloured diamonds. Importantly, the ATO issued specific guidance in December 2018 confirming that pink diamonds are not subject to the “collectables and personal use assets” rules under the SIS Act. This means they are not treated in the same category as art, jewellery, or wine collections, and the stricter storage/display restrictions that apply to those assets do not apply to pink diamonds.
This clarification strengthened the case for including rare coloured diamonds in SMSFs, giving trustees confidence that they can be held under the same framework as other conventional investments — provided standard rules around valuation, arm’s-length transactions, and insurance are followed.
Key considerations for buying diamonds with your SMSF
Storage
Unlike collectables, pink diamonds are not required to be stored away from trustees or members. However, best practice is to use independent, secure vaulting to maintain investment integrity and facilitate smooth resale.
Insurance
SMSF trustees must ensure all assets are appropriately insured in the name of the fund.
Valuation
Regular valuations by a qualified independent valuer are recommended to meet audit requirements and ensure the fund’s accounts are accurate.
Sales
Diamonds may be sold to related parties, provided the transaction is at market value as determined by an independent valuer.
Usage
Diamonds are not to be used by any related party of the SMSF (which unfortunately means you can’t wear them for fun!).
Australian Diamond Portfolio makes buying and storing diamonds for your SMSF easy.
Find out more about how we can assist when investing as an SMSF.