Art collectors down under clear canvases

Photo: Cimexus

Art collectors in Australia are beginning to clear their canvases in response to a new rule surrounding investment in art and other collectible assets.

The Change in law for self-managed super funds was first introduced in 2011 and requires all collectible alternatives to be insured and independently valued and stored externally according to new guidelines, which are designed to stop SMSF trustees gaining any personal benefit from the investments.

The new regulations, which also apply to commodities such as jewellery, antiques, coins, stamps, vehicles, wines and recreational boats, will come into full effect in June 2016.

Now, collectors are selling off their air to avoid the additional costs involved in the new regulations.

Between 2010 and 2011, the value of art and other collectible assets held by SMSFs fell almost 20 per cent, according to the Australian Taxation Office, effectively halving as a percentage of total SMSF assets.

"It has been absolutely terrible," Paul Sumner, managing director of Mossgreen Auctions, tells AFR.

Dealers say that indigenous works are among the most frequently sold at present, after proving popular when funds were heavily active in art investments 10 years ago.