I have recently looked into investing in fine art for my SMSF.
As well as the growth, I am keen to lease the work out to generate income. The organisation I am dealing with require the lessee of the work to have it adequately insured.
Is this sufficient to meet my obligation to have the asset insured, or do I need to have it separately insured for the fund?
A: Thanks for the question.
The ATO advises that the insurance must be in the name of the fund – which will probably not be the case if the lessee is effecting the insurance.
Also, their insurance would not cover periods when the artwork was being transported, or for that matter, if the lessee terminated the lease and returned the work to you.
We suggest that your SMSF effect its own insurance.
