Can an SMSF Invest in Gold Jewellery?

Yes, a Self-Managed Superannuation Fund (SMSF) can invest in gold jewellery.

1. Permissibility: Gold jewellery qualifies as an “acquirable asset” under SISA Section 66, as it is not prohibited and can be held for investment purposes. Gold jewellery is classified as a collectable because it has potential personal-use value (e.g., wearable). The ATO allows SMSFs to invest in collectables, including jewellery.
2. Compliances for Investing in Gold Jewellery –
3. Sole Purpose Test (SISA Section 62): The investment must be solely for retirement benefits (e.g., capital growth, income from resale). No current-day benefits (e.g., wearing the jewellery or lending it to family).
4. Investment Strategy (SISR Regulation 4.09): Update the SMSF’s written investment strategy to include jewellery, considering risk, return, liquidity, and diversification.
5. Arm’s Length Principle (SISA Section 109): Purchase at market value from unrelated parties (e.g., reputable jewellers or auctions). SMSF cannot acquire the jewellery from a related party, even if it is done at arm’s length.
6. Collectables and Personal-Use Assets Rules (SISR Regulation 13.18AA):
   1. Storage: Store in a secure facility (e.g., bank safe deposit box or professional vault), not at a member’s home or related party’s premises. No access for personal use.
   1. Insurance: Insure the jewellery within 7 days of acquisition, with the policy documented in the SMSF name.
   1. No Lease or Loan: Cannot lease, loan, or use the jewellery for personal purposes by members or related parties.
7. In-House Assets (SISA Part 8, Section 71): If the jewellery is acquired from or stored by a related party, it may be an in-house asset, capped at 5% of fund assets.