Art, wine and rare coins in an SMSF: seven days to insure, and never on your own wall

A painting bought by your SMSF has to be insured in the fund's own name within seven days of the day it is acquired. It cannot hang on any wall you or your family live behind. And the fund has to hold a written record of where it is stored, and why, for ten years. None of that is guidance you can weigh up. It is regulation 13.18AA of the SIS Regulations, and each separate failure carries its own penalty against each trustee.

These are the collectables and personal use asset rules. They have applied to anything acquired since 1 July 2011, and since 1 July 2016 to items a fund already held before then. Most trustees meet them the day a fund buys its first piece of art, its first case of investment-grade wine, or a set of coins, and a good number find out about them only at audit.

What the law treats as a collectable

Section 62A lists the assets these rules capture, and the list is wider than "art":

• artwork, jewellery, antiques and artefacts
• coins, medallions and bank notes
• postage stamps and first-day covers
• rare folios, manuscripts and books
• memorabilia, wine and spirits
• motor vehicles and recreational boats
• memberships of sporting or social clubs

Coins and bank notes sit in a place that catches people. They are collectables where their market value is more than their face value. A 2026 one-dollar coin held for a dollar is money. The same coin, held because a collector will pay well above a dollar for it, is a collectable and every rule below applies.

Investment-grade bullion is the other edge. A gold bar valued only on its metal content is not a collectable, so reg 13.18AA does not reach it. That does not free it from the rest of the SIS Act. The bar still has to be held for the sole purpose of providing retirement benefits, kept separate from your own assets, and it cannot be bought from a related party. And a "bullion" coin whose price runs above its metal content because collectors want it has crossed back into being a collectable. If you are not certain which side of that line an item sits on, treat it as a collectable until a valuer tells you otherwise.

The rules that bind from the day of purchase

Four obligations attach to a collectable while the fund holds it.

No use by a related party. A personal use asset cannot be used by you, your relatives, or anyone else connected to the fund. You cannot wear the fund's jewellery to a wedding or drive its car to the shops. Present-day enjoyment is exactly what the sole purpose test forbids.

No lease to a related party. The fund cannot lease the item to a related party, not even at a full commercial rent. The bar is on the arrangement itself, not the price.

Not stored in a related party's home. The item cannot be stored in the private residence of any related party, and "private residence" takes in the whole property: the house, the garage, a shed, the garden. It may be stored, though not displayed, at business premises a related party owns, for example a locked room at a company the members run. Bank vaults and specialist storage firms are the clean answer.

Insured within seven days, in the fund's name. The fund has to hold current insurance over the item, taken out within seven days of acquiring it, with the fund as the owner and beneficiary of the policy. A member's household contents policy does not count, and neither does a policy in a member's name. This one is time-boxed, so the day of purchase is the day the clock starts.

The record you write and keep for ten years

Every time the trustees decide where a collectable will be stored, they have to record the reasons in writing and keep that record for at least ten years. It is a short document, but it is not optional, and its absence is its own contravention regardless of whether the storage itself was fine. Write it when the item comes in, and write a fresh one each time storage changes. We cover why ten-year trustee records matter across the fund at smsfcore.com/blog/smsf-in-house-asset-5-percent-30-june.

Selling it back to yourself

A fund can transfer a collectable to a related party, including to a member personally, but only at market price set by a qualified independent valuer. This applies to anything acquired on or after 1 July 2011. A figure the trustees pick themselves, however reasonable it feels, does not satisfy the rule. The same discipline of a defensible, independent value runs through every 30 June valuation a fund does, which we set out at smsfcore.com/blog/smsf-asset-market-value-30-june.

What a breach actually costs

Each contravention of reg 13.18AA draws an administrative penalty of 10 penalty units under section 166 of the SIS Act. A penalty unit rose to $364 on 1 July 2026, so 10 units is $3,640.

Two features make it bite harder than the headline. The penalties stack by breach: an uninsured piece stored at a member's home with no written record is three separate contraventions, not one. And where a fund has individual trustees, the penalty is imposed on each of them, so a two-member fund with individual trustees is charged twice for the same fault. A fund with a corporate trustee is charged once, because the company is the single trustee. The amount also cannot be paid or reimbursed from the fund; the trustees pay it from their own pockets.

What we track

SMSF Core flags every collectable and personal use asset a fund records, and holds the compliance state next to it: whether insurance in the fund's name is current and was placed inside seven days, where the item is stored and whether that location is a related party's residence, and whether the written storage decision is on file with its date. A member who is one uninsured week or one missing record away from a penalty is visible before the auditor raises it, not after. There is a sample fund at app.smsfcore.com/demo with a collectable loaded against these checks.

SMSF Core is an information tool, not a licensed financial service. Whether these rules apply to a particular item, and how, depends on facts this article cannot see. Talk to a licensed adviser or your accountant before acting.