Self Super Insurance

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The mistake many Accountants, Auditors and SMFS’s are about to make

By now you know that any SMSF that holds Art or Collectables must have the assets insured in the name of the SMSF itself.

Post 1 July 2016, here is what we see:

  1. SMSF’s that comply
  2. SMSF’s that don’t comply
  3. SMSF’s that think they comply but don’t

The SMSF’s that comply have an Insurance Policy in place in the name of the SMSF to cover their assets.  Easy – job done.

The SMSF’s that don’t comply may be deliberate or ignorance, but come audit time this will no doubt be identified and consequences of some sort will flow.  Hopefully these SMSF’s fix the issue and at least the Auditor can go to the ATO with contravention but solution in hand.

The dangerous category is the 3rd one: those SMSF’s that think they comply but don’t.  This is the problem for the Auditor, Accountant and SMSF. (more…)

Art Loss – how, when and why

As we head towards the end of year, we briefly reflect on the 3 main ways you lose art.

“This is a robbery!”

Sneakily dressed as police officers, two men entered the Isabella Stewart Gardner Museum in Boston at midnight following St Patricks day in 1990, overpowered the guards, and managed to get away with 13 priceless pieces of art. This included ‘Storm on the sea of Galilee’ by Rembrandts and ‘The Concert’ by Vermeer which is considered to be the most valuable stolen painting in the world.  A reward of $5million is still offered for its return more than 20 years following its disappearance. (more…)

Melbourne Art Fair – a funny thing

I recently went to the opening night of the Melbourne Art Fair on the 13th August. It’s the biggest Art Fair in Australia and it’s not hard to see why. There was over 70 exhibitors and a packed crowd. There was a great buzz fuelled by abundant alcohol and scarce food (I’m not sure if it’s restricted to the art world, but I’ve noticed that there is a reverse correlation between alcohol and food in art events). (more…)

Is holding Art in your SMSF’s a dying art?

You may have read a number of recent articles and commentary proclaiming the doom of art held in SMSF’s.

See headline of “The art of retirement just got depressing with tax rules on collections” in the Sydney Morning Herald by Andrew Taylor (link here).

Essentially the argument is that the new rules regarding art (namely storage and insurance) are adding extra annual costs to the process of owning art as an investment, and this makes holding art in your SMSF unpalatable (capital growth & rental income [if available] cannot recover the annual costs of holding the investment). (more…)

Who steals Art (and what do they do with it)?

It might be romantic to think that Art is stolen by Art Lovers or perhaps by professionals to be secreted away in some anonymous billionaire’s private gallery.  This may well be true in some part, but sadly most Art is stolen my lovers of money not art. (more…)

What if your painting or collectable is not the genuine thing?

Turns out you have been ‘sold a fake’, or worse still, purchased ‘stolen property’.  What does this mean to you?  Well, unfortunately its not great news.  In recent time, there have been some very interesting articles about our National and State Galleries, which raise a range of risks that you need to be aware of. (more…)

All SMSF’s should consider holding Art & Collectables

I’ve read dozens of articles and heard from even more financial experts why holding Art & Collectibles in your SMSF is a bad idea. Usually the arguments run along lines of its too risky; not a great return; not what SMSF’s should be all about etc. However, I think the articles and the experts are wrong. I’m not going to give financial advice, but I’ll make my argument nonetheless. (more…)

Interesting Diamond Thefts

Last month we discussed interesting art thefts, and this month we’ll take a look at some interesting diamond thefts.  However, before we do, did you read about the recent gold theft in Brisbane?

Police investigating the theft of 75 kilograms of bullion from an Upper Kedron home overnight are appealing for public assistance.  Sometime between 6pm on New Years Eve and 3am New Years Day thieves broke into an Ellie Court, Upper Kedron home, ransacking several rooms before locating a safe and breaking into it. The safe was emptied of its contents- gold and silver bullion and coins worth approximately $200,000- with thieves using the household wheelie bin to transport the cargo to the end of Ellie Court, where the wheelie bin was found abandoned.

It’s a terrible loss and shows the importance of proper security and, hopefully, insurance. (more…)

Interesting Art Thefts

When you hear about Art theft or Diamond heists its hard not to think of Oceans 11. Whilst in reality most thefts are relatively simple (if not forceful), many thefts are sophisticated and complex. Here is a list of some interesting ones:

Jewellery stores are notorious targets, but not always the store itself (which are well secured). When the owner is transporting goods in their vehicle they are vulnerable. A common tactic by criminals is to ‘slow puncture’ the tyre of the owner’s car and then discreetly follow them. (more…)

The Insurance Market and Art & Collectables

Some clients get confused about who/what Self Super Insurance is and who is actually going to pay their claim.  In under 500 words, I’ll explain how insurance operates, where we fit in and who will actually pay your claim.

Insurance chain

Clients (like you) contact an Insurance Broker (like us).  We deal with Insurance Companies (like QBE, CGU, Lloyds) to get you a quote (coverage, price etc).  Behind the scenes, Insurer’s ‘insure’ their own risk with other Insurers – these are the reinsurers (e.g. Swiss Re, Munich Re). (more…)

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