There has been a lot of talk about the so-called SMSF investments on Australian websites and there have been more questions about the kinds of things you can use to invest in SMSFs take time and money. But what is an SMSF anyway and what does gold have to do with it?

SMSF is an abbreviation that stands for Self-Managed Superannuation Fund. Basically, it is an investment vehicle that a lot of Australians are familiar with. It is a trust where assets and funds are held on behalf members until they reach retirement age.

What does this have to do with gold?

For centuries, people have been buying gold to preserve their wealth. Self-Manage Investment funds have been a great feature in the retirement investment space. Since they are about saving for the future, it makes sense that gold bullion would play a significant role.

Why SMSF?

The main reason for establishing SMSF is to establish some control over your financial future. They also offer flexible investment choices. As a trustee of your own investment fund you get to make the decision on the investment strategy and you get to make the decision to buy SMSF which have been proven o have long term benefits.

SMSF might not have the same restrictions that other superfunds have, they might be required to adhere to certain legal restrictions but you can customize your investments to suit the requirements of each member before and after they retire. This means that you can customize your funds anyway you like and even use it to invest in asset classes that aren’t widely available.

When you decide to buy bullion SMSF, consider if this will fall within collectable assets or assets that are for personal use. Collectable and personal assets are things like art, jewellery, cars, wine and boats. According to ATO, coins or notes whose value exceeds their face value should be classified as collectables. Numismatics are collectable, however bullion bars and ingots are not regarded as collectable, and their value depends on the spot price and their metal content. You might need to get some clarity on that and ensure that you are investing in the right gold products and that you follow ATO’s regulations.

What ATO suggests is that you pay special attention to the following issues when you buy bullion SMSF. With respect to gold bullion and gold ingots consider:

• Storage and protection of the gold

You should store your gold bullion in a secure place. Try a vault service away from the SMSF member’s homes.

• Insurance

Take out insurance in the SMSF’s name

• Documentation and records

Keep all your purchase documentation safe. You will need these when you liquidate your gold.

According to The Tax Office rules and guidelines, collectables and precious metal assets under the SMSF’s name like gold bullion cannot be leased, stored or displayed in a public place like a member’s home. It pays to go through the rules and guidelines around taxation as this will affect your assets when you need them the most -, at retirement.