Gold Investments

An SMSF can purchase gold and silver. Remember to have the invoice for the purchase of metals made out in the name of the SMSF and make sure it’s an allowable investment per the investment strategy.

There are three relatively easy ways to buy gold or get exposure to the gold market:

With providers like Ainslie Bullion, Perth Mint or Bullion Capital you can buy gold coins or gold bars and elect to take physical delivery of the bullion or have it stored securely under a custodial arrangement. The Perth Mint is backed by the WA Government. You’ll need to open an account and go through full identification checks – so allow about a week to get an account set up.

So, what are the costs to trade? For a 1kg gold bar, the spread is around $1.50/oz or 0.10% and the execution fee is around 1.00%. The storage fees on a 1kg gold bar will also be less than 1.00% for the year.

Download more information about Gold Investments

 

Getting started

One of the providers noted above is Bullion Capital and there is a brochure explaining  more on gold allocation. To open up a gold purchasing account with Bullion Capital, click here.

Commission

We may receive commissions from any of the providers noted above.

 

Collectables

Make sure your SMSF purchases precious metals for the weight value of the metal. If there is a premium for the metal because it is in coin form, it is classified as collectables under the SIS act. The Tax Office has introduced a set of more stringent rules when investing in collectables and personal use assets. For more info, please see our collectables and personal use assets page.

 

Questions and Answers

Q: Can an SMSF purchase precious metals from a related party
Q: What are the storage options for gold in an SMSF
Q: Insurance considerations - is it compulsory to insure gold and precious metals?
Q: Purchase invoices must be in the name of the SMSF
Q: Proof an SMSF holds the asset at year end
Q: Will the Fund be taxed on gains made on its asset holdings

Make sure gold and other precious metals are a valid investment option by reviewing the Investment Strategy of your SMSF. You can download an Investment Strategy template here.

  • Duncan

    Is a SMSF the only way to purchase precious metals with super? I.e. Can it done via comerical super fund?

    • Hein Preller

      Duncan, as far as I know, no other type of super fund allows for an investment in precious metals. The only way to have control of your super and invest in this asset class is to set up an SMSF.
      Its this flexibility that make people set up an SMSF. You can do a Google search to confirm.
      Thanks

      • Duncan

        Thanks Hein. As I suspected. I will have do more research on SMSFs.

  • reg

    If I was to purchase physical gold bullion bars in my SMSF and take delivery of said bullion what are the initial and ongoing year on year audit requirements to satisfy the act rules . I wil not be using a storage facility so there will be no storage statement..
    How do I ensure “comfort over valuation and existence” as an audit requirement.
    Thanks in anticipation of your help.
    Reg

    • Hein Preller

      Reg, please send us a dated photo at year end showing the metals, displaying the serial numbers of the bars. We will also ask you to do a representation letter, so you tell us the quantities owned. This will confirm the existence of the asset.
      For valuation, we will use year end rates to determine the year end market values for the gold and silver. We will reflect these market rates in the Financial Statements of the SMSF.
      Also remember if there’s buys and sells during the year to send us those invoices.
      Thanks

  • Norzaini Amin

    I’d like to set up an individual SMSF Fund to invest in Precious Metals but only have 37K in my super. how would i go about setting this up?

    • Hein Preller

      Norzaini,
      Your question seems to have two parts to it, namely is $37k enough to set up an SMSF and how do you purchase metals in an SMSF.
      I can answer as follows:
      1. There’s no legal minimum or maximum amount you can have in Super. Its ultimately your choice. In an SMSF there’s a fixed fee, so if your balance is low, the annual charges may be a relatively bigger portion. However, you may still want to proceed if you plan to add substantial amounts to your SMSF or want to control your assets in a class not offered by retail or industry super funds;
      2. To get the process going, apply on our website: http://www.smsfwarehouse.com.au/smsf-setup/
      We will give you a call to discuss. But remember its ultimately your decision and it has to work for you.
      Keep well,
      Hein

      • Norzaini Amin

        Thanks for the reply, another quick question, when I proceed to the signup page, the form requires “compulsory” two trustees. that would be me and another investor? (partner). but what if I wanted this to be an individual setup?

        • Hein Preller

          Norzaini,
          An SMSF is a type of Trust and therefore needs either:
          1. Two Trustees as individuals, note you can be the only Member
          2. A Corporate Trustee
          In an SMSF you have two capacities, that of a Member (money in the SMSF) and each Member must be a Trustee (a Trustee act like a manager for the SMSF). The second Trustee does not have to be a Member.
          You can ask a spouse, friend or sibling to be a Trusteer with you in the SMSF. They do not necesarily have to be a Member though. More on Trustees duties and guidance can be found on this page, especially the second booklet, discussing Setting up an SMSF:
          http://www.smsfwarehouse.com.au/smsf-guide/
          Trust this helps

  • Che Guy

    Hi Id like information please on rolling over my Super to a SMSF to
    purchase bullion. Im a single entity, I have a registered P/L company,
    and I have $100k plus in my current Super account. Can you provide information whether this is possible? Thanks, Che

    • Hein Preller

      Che, if you have an existing company to use as a corporate Trustee, we can utilise this and would therefore not charge you to set up a company. You will only pay the $150 to set up an SMSF.
      To proceed, click on the orange tab on top of this page, noted as “SMSF Setup”. Go on to the individual set-up section so it cost you $150 only and add the name of the company in the notes section. As it will ask you for details of a second Trustee, add any info in there, just a fake name or repeat your details in order to go through to the next screen. We will phone you and discuss before we set it up with the ATO.
      Trust this answers your question.

      • Ricky Pawul

        Don’t think it does

  • Jas

    What are the insurance requirements for taking physical possession of your smsf’s gold. We would want to keep it in our home.

    • Ricky Pawul

      Treated like cash. No Ins’ required.

  • Scott

    A few people below have mentioned about ‘Taking Possession’ & ‘Physical Possession’ of the bullion and ultimately not paying any storage fees. I was under the impression that you cannot in any way benefit from any SMSF asset, i.e you cannot store it at home?

    • Ricky Pawul

      You can store non-collectible bullion at home. Need to reasonably document the situation to satisfy the audit but be careful not to give too much info (risk of theft).

  • Jeremy

    G’day Hein – given your previous advice that WW doesn’t have exclusive arrangements with commissions with investment products – is this gold outfit an option – i think it’s in the UK – https://www.bullionvault.com/
    Thanks
    Jeremy

    • https://www.smsfwarehouse.com.au Superannuation Warehouse

      Jeremy,
      When investing in gold via your SMSF, make sure the SMSF has a legally enforceable right to the assets it owns.
      Overseas companies sometimes do not recognise an SMSF as they are either not familiar with it or its considered a Trust they don’t deal with. There are local providers familiar with SMSF’s.
      I guess its your choice to use the provider of your choice. Remember to make the payment for the assets purchased from your SMSF bank account to clearly illustrate ownership by the Fund.
      Keep well,

  • Brian McKee

    Long story short, have some super in ANZ ($55-$60K)

    Would like to move it into gold 100%. Is this something you can facilitate ?

    Please email me with further details please. Just living and working overseas hence the email.

    Will await your response

    Many thanks
    Brian

    • https://www.smsfwarehouse.com.au Superannuation Warehouse

      Brian,

      If you want an SMSF, we can set it up for you. Apply online and we will execute the SMSF set-up.

      Part of the set-up is issuing a new SMSF with an Investment Strategy. It may be a good decision to diversify your assets, but if you prefer to go for a single investment option, this is your decision. So you can add your total super into gold if you want. The default investment strategy allows for both these options.

      To set up an SMSF, follow the link by clicking on the orange section on the top left of this page.

      Keep well,

      • Brian McKee

        Thanks, had a look at the form but as Im currently living and working overseas how do I set this up, as only option for Australian addresses and details etc. Is there someone to assist me directly with getting set up ?
        Thanks again

        • https://www.smsfwarehouse.com.au Superannuation Warehouse

          Brian,

          There are restrictive residency rules in place for SMSF’s. For an SMSF to be taxed at the concessional rate of 15%, vs. 45% tax on other types of trusts, the Fund must be resident in Australia.

          See here for the rules around residency:
          https://www.smsfwarehouse.com.au/smsf-setup/residency-rules/

          Best to avoid an SMSF if you are not a resident of Australia.

          Keep well,

  • AF

    Interested in gearing my investment. are there any banks that would lend to purchase gold? I know i would have to set up a bare trust arrangement.

    • Hein Preller

      AF,

      You will be hard pressed to find a bank that allows for this type of lending. No bank that I know of would give this type of loan.

      A practical consideration is that you will pay interest on the loan, where to gold investment give a NIL yield. So apart from capital gains, there is the real possibility to move backwards due to interest payments.

      You are correct in that a loan is possible from a technical perspective. A Bare Trust can be set up, but then you have to consider a related party loan:
      https://www.smsfwarehouse.com.au/smsf-investments/property/smsf-loans/related-party-loans/

      Trust this gives you the guidance needed.

  • Gurmeet Singh

    Hi Hein,
    I am interested in investing in Diamonds through SMSF.But I can purchase diamonds at more better price from India.
    Can I store Diamnds in bank vault in India,to avoid paying excise duty.
    Also,Can I make the payment to diamond dealer cash ,as He often visit Australia for
    Exhibition.
    Kindly advise
    Gurmeet

    • Hein Preller

      Gurneet,

      An SMSF can invest in a variety of assets as long as this is noted in the Trust Deed or Investment Strategy of the Fund.

      The default investment Strategy we issue allows for this type of investment:

      https://www.smsfwarehouse.com.au/smsf-investments/strategy/

      Always make sure the purpose of the investment if to provide for your long-term retirement benefit. This is also know as the sole-purpose test:

      https://www.smsfwarehouse.com.au/smsf-investments/sole-purpose-test/

      An SMSF should not do cash transactions as this does not leave a good audit trail. Its preferable to purchase from a reputable counter party and ensuring the invoice is in the name of the SMSF. The SMSF always needs to have a valid title over the assets it owns.

      Trust this gives you the guidance needed.

      • Gurmeet Singh

        Thanks Hein.
        That was informative.
        Just one query,If the transaction is not cash,can we make transfer to the diamond dealer bank account in India.The dealer is located in India from where I would buy diamonds.
        Thanks in advance

        • Hein Preller

          Yes, thats a better ioption.

          • Gurmeet Singh

            Ok..How to start SMSF through your company.What charges I need to pay upfront & for audit!

    • Hein Preller

      Gurmeet,

      All transactions in an SMSF must be owned in the name of the SMSF and there must be a clear audit trail of transactions.

      To work with cash transactions it not something we would normally do. When auditors or the Tax Office want to confirm events, its not easy to prove that the transactions took place. Best to steer clear here.

      I you want to purchase diamonds in an SMSF, make sure the investment strategy allows for this, have an invoice issued in the name of the SMSF and pay it directly from the bank account of the Fund.

      Keep well,

  • Blunt but honest

    Hi. Does the trust deed you use in establishing an SMSF via your service permit the holding/ownership of loose diamonds as an investment? They will not be set and will hold specific certification and sealed to hold the value. The intention is specifically pink certified Argyle diamonds.

    • Hein Preller

      Blunt,

      There is noting in the Deed that prohibit this type of investment. It may be a good idea for such a specific investment to include it in the Investment Strategy of the SMSF. You can download and edit a copy here:

      https://www.smsfwarehouse.com.au/smsf-investments/strategy/

      The for the annual audit steps, it may be a good idea to do a date photo noting the SMSF still owns the asset.

  • Gurmeet Singh

    Dear Sir
    I am interested in setting up of SMSF for investing in gold bullion & Pink diamonds.However I would not be buying these assests(Gold bullion & Diamonds)from dealers.
    I have noticed that My friends & friends of friends often sell these personal belongings for some personal issues like property buying etc.
    Can I buy from these non related parties ?
    Also Can these two assists be bought from related parties like cousins ,brothers etc. ?
    I can get valuations for these from independent valuers.

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Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.