A classic or collectable vehicle is classified by the ATO as a ‘collectable or personal use asset’. These also include things like artworks, jewellery, boats and wine.
There are restrictions on investing in a classic car through your SMSF and investment in such items must be made for genuine retirement purposes (not to provide any present-day benefit), meaning:
- The vehicle cannot be leased to, or part of a lease agreement with, a related party
- The vehicle cannot be used by a related party
- The vehicle cannot be stored or displayed in a private residence of a related party.
In practical terms, this means the car cannot be driven under any circumstances. It must also be insured and be safely kept. Even if you choose to house the car in a different garage and thereby moving it, the car would need to be transported there, not driven.
Further restrictions also apply:
- Your investment must comply with all other relevant investment restrictions, including the sole purpose test
- The decision on where the item is stored must be documented (for example, in the minutes of a meeting of trustees) and the written record kept
- The item must be insured in the fund’s name within seven days of the fund acquiring it
- If the item is transferred to a related party, this must be at market price as determined by a qualified, independent valuer.