An SMSF can purchase gold and silver. Remember to have the invoice for the purchase of metals made out in the name of the SMSF and make sure it’s an allowable investment per the investment strategy.
There are three relatively easy ways to buy gold or get exposure to the gold market:
- Buying physical metals from a provider like Ainslie Bullion, Perth Mint or Bullion Capital,
- Buying Gold Exchange Traded Funds (ETFs) and
- Buying shares in Australian gold producing companies.
With providers like Ainslie Bullion, Perth Mint or Bullion Capital you can buy gold coins or gold bars and elect to take physical delivery of the bullion or have it stored securely under a custodial arrangement. The Perth Mint is backed by the WA Government. You’ll need to open an account and go through full identification checks – so allow about a week to get an account set up.
So, what are the costs to trade? For a 1kg gold bar, the spread is around $1.50/oz or 0.10% and the execution fee is around 1.00%. The storage fees on a 1kg gold bar will also be less than 1.00% for the year.
Getting started
One of the providers noted above is Bullion Capital and there is a brochure explaining more on gold allocation. To open up a gold purchasing account with Bullion Capital, click here.
Commission
We may receive commissions from any of the providers noted above.
Collectables
Make sure your SMSF purchases precious metals for the weight value of the metal. If there is a premium for the metal because it is in coin form, it is classified as collectables under the SIS act. The Tax Office has introduced a set of more stringent rules when investing in collectables and personal use assets. For more info, please see our collectables and personal use assets page.
Questions and Answers
Answer: Unfortunately, an SMSF cannot purchase precious metals from related parties. The only assets that can be purchased by the SMSF from a related party are commercial properties and listed securities. In addition, precious metals cannot be used as an in-specie contribution.
Answer: It is the Trustee’s responsibility to ensure all gold assets are securely protected. It is possible to store the gold or precious metals at the Trustee’s home or the preferable option is to use a dedicated vault service. Remember to have invoices for storage fees made out to the SMSF and not your personal name.
Answer: There’s no specific insurance requirements for gold. It is the Trustee’s decision to insure its assets. If insurance is arranged, ensure the insurance policy is in the name of the SMSF and not part of your personal insurance policies. It is important for an SMSF to pay expenses of the SMSF only and not to mix personal affairs with the SMSF. Its therefore also a good practice for the SMSF to pay its expenses directly from its own bank account.
Answer: Trustees should keep a record of the purchase and sales documents in the name of the SMSF as proof of ownership. Make sure the SMSF name is noted on invoices and the quantity of metals purchased are noted e.g. 3 ounces of gold coins.
Answer: At year end, please send us a dated photo showing serial numbers of the assets held in the SMSF. In preparing the accounting, we will value the assets at year end rates.
Answer: An SMSF is not taxed on unrealised gains or losses. Only realised gains are taxed and this is treated as a capital asset, meaning the SMSF will be taxed at the reduced rate of 10% if the asset was held for more than 12 months.
Make sure gold and other precious metals are a valid investment option by reviewing the Investment Strategy of your SMSF. You can download an Investment Strategy template here.
