Assets in an SMSF are regarded to be a part of thematrimonial asset base and also to be a family’s retirement nest egg. However, there are circumstances where it may not go as planned and there is a relationship break down; for example, separation or divorce with your spouse.
As the balance in an SMSF grows it can be a sizable asset to be dealt with, in an event of divorce. Trustees must ensure to make decisions in accordance with the super regulations.
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The Trustees need to continue to act in the best interest of all Members even though the Members and Trustees of the Fund may have difficulties with their partner on a personal level. In addition, the Trustees of the Fund cannot:
- Exclude another Trustee from the decision-making process,
- Ignore requests to redeem assets and roll money over to another regulated complying super fund,
- Or take any action not allowed by Superannuation Legislation and the Trust Deed
Artwork is generally defined by the ATO as a:
- painting,
- sculpture,
- drawing,
- engraving or
- photograph.
This includes any reproduction of such a thing, or property of a similar description or use.
SMSFs can invest in classic cars if it is allowed by the Deed and Investment Strategy of the Fund. However, there are restrictions that you must be mindful of. These restrictions are described by Regulation 13.18AA of the act.
In order to invest in classic cars under an SMSF name, the investment has to pass the sole purpose test. This means the investment objective should be to provide for the retirement benefits of Members.
To satisfy the sole purpose test, please make sure the classic car is not:
- Purchased from a related party,
- Leased to, or part of a lease arrangement with, a related party,
- Used by a related party, or
- Stored or displayed in a private residence of a related party.
For example, a related party is not allowed to drive the classic car in any circumstance, even for maintenance purposes.
Be mindful that collectables may not be easily converted to cash like listed shares. As an SMSF may have to pay operating expenses, income tax and potentially a minimum pension, ensure enough liquidity in the Fund to allow for these payments.
Lastly, remember the SMSF must take out insurance on the asset within 7 days of acquiring it.
Answer: It doesn’t matter whether the divorce is amicable or not, you and your partner will require binding financial agreements or orders, which will involve the assistance of a lawyer to confirm this splitting arrangement of the Member balances.
Answer: Yes. If you don’t get legal advice, the payment splitting agreement won’t be binding on the Trustee of the superannuation fund. To make the payment splitting agreement to be binding, each party is required to obtain independent legal advice and a legal sign-off regarding the Member balance split. This is noted in the page 17 of Super Splitting issued by Attorney-Generel’s Department.
Answer: Although it is advisable to get the family court involved to confirm this splitting arrangement of the Member balances, you can do it yourself. The SIS Act is silent on this issue, but trustees can come to an arrangement. Be mindful this may be open to legal challenge later on if not stamped by the court.
See our Transferring Benefits Out page for more information and to download the rollover form.
