Super Art update – ATO relaxes storage requirements
Since 2011 strict restrictions have been in place for self-managed super funds (SMSFs) wishing to buy artwork investments.
Those restrictions cover three broad areas:
2. display; and
3. related party dealings.
In relation to the last two areas, the intent of the original legislation was to prohibit members from enjoying and having access to artworks owned by their super fund. The regulations made law the untested proposition that enjoying art owned by a super fund constituted a pre-retirement benefit, which is contrary to the sole purpose test of only holding investments for your retirement. A recent taxation ruling from the Australian Taxation Office (ATO) has loosened those requirements.It is now permissable for a company to store artworks that belong to its SMSF in its business premises, so long as those premises are not the residential property of one of its members.
In other words, SMSFs no longer have to store their artworks in expensive storage facilities if they own or lease commercial real estate for their business. Their super art may be stored there.
So what is the definition of ‘storage’?
According to the Oxford English Dictionary (OED) storage is ‘the action or method of storing something for future use’. It is also ‘space available for storing something’. Hanging paintings in the business premises of a member or associate of a SMSF should meet the definition of storage if there is no current use for the artworks. This is consistent with the sole purpose test and the need to prevent a possible pre-retirement benefit. Hanging paintings in an empty room is also consistent with these principles and should be seen as a storage method.
Of course the government could simply now amend section 62A of the SIS Act and allow companies to display their super art investments for the current enjoyment of their staff and visitors.
2018 Income tax returns due by 31 October
If you would like us to prepare and lodge your 2018 income tax return, we must add you to our lodgement list by 31 October. Being placed on our list will allow you to access the deferred lodgement and payment concessions granted to us by the ATO.
If you are not on our list by the end of the month, you must lodge your income tax return during October and pay any income tax you may owe by the following month. Failure to meet this deadline may also expose you to possible ATO fines and penalties.
Vale Charles Blackman and Mirka Mora
Two giants of the Australian art world, Charles Blackman and Mirka Mora, passed away recently. Both were larger than life figures, indelibly associated with the post-war Australian Modernist movement.
Mirka Mora was a gifted artist who brought European sophistication to 1950s Melbourne. Her legacy will be long and includes the founding of Tolarno and the passing down to her children her love of the arts. Sons Tiriel (acting), Phillipe (film-making) and William (gallerist) have all made significant contributions to the creative industries. Tiriel in particular for his ‘It’s the vibe’ comment in classic Australian film ‘The Castle’.
Charles Blackman possessed an endless stream of restless creativity. I was honoured to present a collection of works from his studio, dated 1950 to 1990, at Joel Fine Art in 2007. It was said that his drawings were like wrapping a line around a dream. He held the record price achieved by a living Australian artist until his sudden death last month. Like Mirka Mora, his legacy endures with his children, including artists Auguste and Christobel Blackman and musician-artist Bertie Blackman.
Musei Reali Torino #3, 2018
Inkjet print on archival cotton rag paper
105 cm by 140 cm
See more at Fox Galleries