You need to manage your self-managed super fund's (SMSFs) investments in the best financial interests of fund members and in accordance with super laws.
You're free to choose what type of assets your SMSF invests in, providing those investments are not prohibited by the super laws and:
- are permitted by your fund’s trust deed
- meet the sole purpose test.
Funds may choose to invest in assets which are classified as collectable or personal use and when they do, these assets have specific storage and insurance requirements.
Are pink diamonds collectable or personal use assets?
The ATO has recently been asked if pink diamonds are classified as collectable or personal use assets.
Natural diamonds (including pink diamonds), when held in loose form, are not considered collectable or personal use assets under the superannuation legislation and as such do not have specific storage and insurance requirements.
Trustees and auditors should note these rules only apply for ‘diamonds held in loose form’. This means the diamond cannot in any way be mounted, integrated into or used as an item for adornment or other purposes which would be inconsistent with the holding of the diamond in loose form for investment purposes.
Insurance and storage requirements for diamonds
Despite not being subject to specific requirements, we would recommend trustees hold adequate insurance and consider appropriate storage arrangements for these types of assets. These are sound practices when protecting a fund’s assets.
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