Everyone has worried about what will become of their lives once they have retired at some point in their lives. As worrying as that may be, it doesn’t necessarily need to be a negative thing. If you’re worried about your pension or dissatisfied about the lack of control that you have over it, then you can always opt for self managed superannuation funds, as that will allow you to have full control over your investment powers and give you the freedom to invest in whatever you wish, even if you wish to invest in works of art, collectibles, or wine.
Investing in wine
Yes, your SMSF does allow you to invest in wine, however, you will need to strictly adhere to specific rules if you really truly want to invest in it. Unfortunately the biggest rule of them all is that you can’t drink the wine. As sad as it may be, it’s true, since you will be selling the wine off later on once it has increased some more in value anyway.
Another big no-no is buying the collection of wine from another party within the fund, in other words, any of the trustees. You’re not allowed to purchase the wine or collectible or artwork, or anything as such, from any of the trustees. That said, since the main aim of the fund is to save money for the retirement fund, one also needs to ensure that the wine investment is part of the investment strategy that you outlined in the trust’s deed.
Additionally, both you and your investment partners, or rather, trustees, need to show that they have all done adequate research on the wine’s investment potential and are knowledgeable about it. Also, you need to show why it was a good idea to invest in that particular wine and not anything else. This also goes for any other type of investment that might be similar to investing in wine, such as collectibles and antiques.
A few other rules that you will also need to adhere by include: not storing the wine or the wine collection in your own house or property, or the property of any of the other trustees or anyone related to them; not leasing the wine to any of the trustees or anyone related to them; the party members or anyone related to them aren’t allowed to drink the wine; when deciding on where to store the wine, the reasons for why you decided to store it where you did should be stated; and the asset should be insured within a week of its acquisition.
The rules were made stricter this year, but all for a good reason, as it will ensure that the money in your fund is used solely for retirement purposes and nothing else. These are just general guidelines and are by no means meant for every investor planning on investing in wine. Depending on the circumstances and investment objectives, the rules may differ.
For more information on SMSF wine investment rules, read https://switzersuperreport.com.au/smsf/can-my-smsf-really-invest-in-wine/