Rare Coloured Diamonds are allowable investments inside an SMSF Portfolio and offer many benefits to Trustees putting together a robust and truly diversified portfolio.

There has been a massive surge in the number of Australians setting up Self Managed Super Funds (SMSF’s) over the last decade, taking personal control of this key financial asset. Today, there are over a million SMSF’s, collectively having more than $600 billion collectively in investable funds.

Alongside the desire for transparent fund management costs and for legal control, the flexibility for people to make their own investment choices and buy into asset classes that traditional funds ignore has been a major factor in the growth of this sector.

Whilst property, equities and term deposits are the major assets that SMSF Trustees tend to invest in, diamonds are also allowable investments inside an SMSF Portfolio and offer many benefits to Trustees putting together a robust and truly diversified portfolio.

 

Guidelines for buying diamonds with your SMSF

As with all assets held in your SMSF, there are a number of administration and compliance responsibilities for Trustees who choose to invest in diamonds, art, or other collectibles.

Please note, the following information is a guideline only. Be sure to consult your SMSF advisors to fully understand the requirements.

Since 1 July 2011, diamonds owned by SMSFs must be held according to new regulations regarding storage and insurance that came into full effect from July 2016.

 

Click here to view the ATO’s useful summary of the SIS Act (Superannuation Industry Supervision Act) regulations relating to diamonds and other collectibles.

Storage

The diamonds you purchase for your SMSF may not be displayed or stored in your home, nor the home of any related party of the SMSF. This storage requirement has been introduced to prevent SMSF trustees receiving a personal benefit from the SMSF investment.

SMSF trustees must record in writing the reasons for the decision on where the diamonds will be stored, and keep that record for 10 years.

Insurance

SMSF trustees must ensure the diamonds are insured in the name of the fund within 7 days of acquisition.

Valuation

Valuations must be performed on a regular basis by a qualified independent valuer. 

Sales

Diamonds can be sold to a related party provided the sale is at a market price 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!).

Leasing

You may not lease any diamonds in your portfolio to any related party of the SMSF. A ‘related party’ includes the SMSF members and their relatives, and any partnerships, partners of partnerships (if a member is in partnership with them), and trusts and companies that SMSF members control.

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.

 

Be sure to consult your SMSF Advisor to ensure you fully understand the requirements.
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