Can I buy gold with my SMSF?

Yes, you can buy gold and other precious metals with your SMSF however, the form of gold that you buy will affect the evidence you are required to keep for audit purposes to ensure your fund remains compliant.

What are the ways in which your SMSF can purchase gold?

• Gold bars/Bullion
• Coins
• Exchange Traded Funds (ETFs)
• Jewellery and other collectables

Coins and jewellery will generally be classified as collectables with specific rules applying under the superannuation laws and regulations (SISA).  Whereas ETFs are not collectables and gold bullion is generally not a collectable.

Hint – your fund’s investment strategy and trust deed should be reviewed to ensure the SMSF can acquire and hold the gold investment.

Gold and Jewellery -Collectables and personal use assets

Section 62A of SIS and SIS Reg 13.18AA provide specific rules when an SMSF invests into collectables and personal use assets. Refer to the ATO website for further details on collectables.

Gold coins are classified as collectables when their market value surpasses their face value, particularly in the case of rare or historical coins that are highly sought after by collectors for their distinct characteristics. Similarly, gold jewellery may also be considered a collectable if it’s worth exceeds the intrinsic value of the metal itself.

Physical gold bullion typically isn’t viewed as a collectable because it’s worth is tied to the current spot price of gold. For instance, a Gold Cast Bar from the Perth Mint qualifies as bullion since its value closely mirrors the spot gold price, the only distinguishing features are its engraved serial number and purity stamp.

Gold coins or jewellery classified as collectables are subject to additional audit standards when acquiring or holding collectables. Collectables:

• cannot be acquired from a member or other related party or leased to or used by a related party
• cannot be stored in the private residence of a related party, including a shed, garage or other building on the related party’s property – the ATO advised the item can be stored in the business premises of a related party BUT cannot be displayed or used in any capacity
• must be insured within 7 days of acquisition by the SMSF and be in the name of the SMSF
• must be supported by a formal written record to explain the reasons for choosing to store an item in a particular place is required to be kept for 10 years
• must be valued by an independent qualified valuer when being sold to a related party

Exchange Traded Funds (ETFs)

Your SMSF can invest in an ETF with gold-backed derivatives, providing market exposure without holding physical gold, and helping diversify the portfolio. ETFs are traded on the ASX, making their existence, value, and ownership easy to verify for audit purposes.

What are audit considerations when owning gold investments?

Physical gold is not considered a collectable under SISA, but it must still meet audit requirements.

Gold bullion may be stored at the member’s residence, in a storage vault, at the Perth Mint, or another location. However, independent verification is necessary for the following:

• Insurance: The gold must be insured separately from the homeowner’s contents policy, with coverage reflecting its current market value. The Perth Mint provides a government-backed guarantee for gold bullion stored at its facility.
• Acquisition Documentation: Records demonstrating that the SMSF acquired the gold from unrelated parties.
• Inventory: A register detailing the gold holdings of the SMSF.
• Evidence of Ownership Continuity: Proof that the gold has not been sold or altered. If stored at home, an acceptable form of evidence may include a photograph of the gold alongside a current dated newspaper, or a statutory declaration from the trustee. If stored at a storage vault or the Perth Mint, a statement from the provider is considered independent third-party evidence acceptable to the SMSF auditor.
• Valuation: An assessment reflecting the spot price of gold.
• Storage Details: Explanation of how the gold is secured if held at the member’s home or business premises, such as storage in a safe or a bank vault.

Gold can be held in many different forms by an SMSF and can spread the risk in uncertain economic and politically volatile times. An SMSF trustee must be aware of the requirements in holding these types of investments and be aware of the risks and returns.