How to purchase a vintage or classic car in the SMSF?

Vintage and Classic Cars in an SMSF

Can an SMSF Buy a Classic Car?

Yes, a vintage or classic vehicle can be held by an SMSF as an investment, provided the investment complies with superannuation law and the SMSF’s investment strategy.

An SMSF-owned classic car is an investment of the fund. It is not a personal vehicle for members, trustees or related parties to use or enjoy.

At iCare Super, we help SMSF trustees with the accounting, administration, taxation and compliance requirements associated with alternative investments, including eligible vintage and classic vehicles.

Rules for a Vintage or Classic Car Owned by an SMSF

1. Store the Car With an Independent Storage Provider

The vehicle must be kept at a professional or unrelated-party storage facility.

It should not be stored at the home or business premise of an SMSF member, trustee or related party where they could have access to or benefit from the vehicle.

Keeping the vehicle with an independent storage provider also provides a clear record that the car is being held as an investment.

2. Arrange Insurance Immediately

Insurance should be arranged as soon as the SMSF acquires the vehicle.

The insurance policy should be in the name of the SMSF trustee, consistent with the ownership of the vehicle.

Keep a copy of the policy and related documents with the SMSF investment records.

3. Obtain an Annual Independent Valuation

The vehicle should be independently valued each year to support the SMSF’s financial reporting and annual audit.

iCare Super can recommend an independent qualified valuer if required. The valuation cost is paid by the SMSF.

Any valuer recommended by iCare Super is independent of our business. iCare Super does not receive any referral fee, commission or other financial benefit from the valuer.

You are also welcome to appoint your own independent qualified valuer. The valuer should be independent of the SMSF and have appropriate knowledge and experience in valuing vintage or classic vehicles.

4. The Car Can Be Unregistered or Have Classic/Club Registration

A vintage or classic vehicle owned by an SMSF does not necessarily need to have normal road registration.

The vehicle may be unregistered or have an appropriate classic car or club registration.

Registration does not change the requirement that the vehicle must remain an SMSF investment and cannot be used for personal purposes.

5. No Personal Use by Members, Trustees or Related Parties

This is one of the most important rules when an SMSF owns a classic or vintage car.

Members, trustees and related parties must not drive, use, borrow, hire or otherwise obtain a present-day benefit from the vehicle.

For example, an SMSF-owned vehicle should not be used for:

• Personal driving or transportation
• Weekend trips or holidays
• Family functions
• Weddings or private celebrations
• Recreational activities
• Personal car shows or events
• Photography for a related party
• Weddings or events operated by a related party
• Display or use in a related party’s photography, wedding or event business
• Any other activity that provides a personal benefit to a member, trustee or related party

The fact that the vehicle is expected to increase in value does not allow members or related parties to use it personally.

6. The SMSF Cannot Buy the Vehicle From a Member or Related Party

The vintage or classic car should not be purchased by the SMSF from a member or related party.

The purchase should be made on an arm’s-length basis and at an appropriate market value.

Keep the purchase agreement, seller details, valuation or market evidence, invoice and payment records as part of the SMSF records.

7. Repairs After Purchase

A newly acquired vintage vehicle may require some repairs or maintenance.

Where appropriate, minor initial repairs of around $2,000 to $5,000 may be paid by the SMSF. The work must relate to the SMSF-owned vehicle and the invoice should be issued to the SMSF trustee.

The SMSF should retain the repair invoice, details of the work and evidence of payment.

8. Transportation and Purchase Costs

The SMSF can pay legitimate costs associated with purchasing and transporting the vehicle where those costs relate to the SMSF investment.

For example, this may include the cost of transporting the vehicle from the seller to the storage facility.

Invoices should be issued to the SMSF trustee and, where possible, paid directly from the SMSF bank account.

Vintage and Classic Car SMSF Checklist

Before purchasing a classic or vintage vehicle through an SMSF, consider the following:

iCare Super – SMSF Specialists

iCare Super provides SMSF accounting, administration, taxation and compliance services to SMSF trustees.

We can assist with the ongoing requirements of alternative SMSF investments, including vintage and classic vehicles. There is no additional fee for your SMSF to hold a vintage or classic vehicle.

Our services include:

• SMSF annual financial statements and tax return
• SMSF independent audit
• Independent valuer recommendations
• Review of acquisition and transaction records
• Advice on collectables and personal-use asset compliance
• Ongoing SMSF compliance

Considering a Classic Car Investment Through Your SMSF?

If you are considering purchasing a vintage or classic car through your SMSF, contact iCare Super before proceeding with the purchase.

We can help you understand the SMSF requirements and the documentation needed for the investment.

Disclaimer

The information on this page is general information only and does not constitute financial, investment, tax, legal or superannuation advice.

SMSF investments must comply with the Superannuation Industry (Supervision) Act 1993, relevant regulations and other applicable laws. Whether a particular vintage or classic vehicle can be acquired and held by an SMSF depends on the circumstances of the fund and the proposed investment.

SMSF trustees are responsible for ensuring that their investments comply with superannuation law and the fund’s investment strategy.

Rules and regulatory requirements may change. Trustees should obtain appropriate professional advice before entering into a vintage or classic vehicle investment through an SMSF.

iCare Super does not guarantee that a particular investment or transaction will be accepted by an SMSF auditor or the Australian Taxation Office.

For advice relating to your specific circumstances, please contact iCare Super or another appropriately qualified professional adviser.