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Double Rifles, Single Shots & Combinations >> Double Rifles
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375Brno
.333 member


Reged: 18/10/05
Posts: 354
Loc: Brisbane, Australia
Superannuation = Double Rifle, would this work ??
      #48181 - 27/01/06 11:28 AM

Hi

Would appreciate some advice on the following.

If for example I wanted to buy a DR for $25k then given the fantastic tax system we have in Australia I would have to earn approx $50k before tax to get my $25k. So, what if I moved some of my existing superannuation into a self managed fund and used some of the proceeds to buy said DR. Alternatively I could start a new fund from scratch and build it up using pre-tax payments. I know that a self managed fund needs to be of a certain size to make it viable and there may be limits to how much can be used to invest in certain asset classes (ie. I could not buy guns with all the money) but other than that the main advantage is that the super is paid in before tax and has a much smaller tax rate. I would miss out on the revenue that the $25k would make in super but in theory I should get that back with capital gain as long as I bought the right gun. Not that I would be likely to sell it anyway.

Anyone looked into this before or tried it ? Would appreciate feedback.

375Fetish

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NitroXAdministrator
.700 member


Reged: 25/12/02
Posts: 39885
Loc: Barossa Valley, South Australi...
Re: Superannuation = Double Rifle, would this work [Re: 375Brno]
      #48190 - 27/01/06 01:17 PM

It could be done but you would have to be very very careful.

You must be able to prove the investment in the double rifle is for superannuation investment purposes. And not for other purposes, such as a consumer good purchase.

If you fail to satisfy the tax commissioner that it was a genuine investment, your DIY self-managed super fund will no longer be a complying super fund and you will be taxed at 48.5% of the entire capital value of the fund, and this will continue until it complies.

eg if your fund is worth say $200,000 and you buy a double rifle worth $50,000. As a result your super fund is assessed to be non-complying, you will receive a tax bill as a result of $97,000 wiping out half the value of your fund instantly.

Some ideas:

1. Obviously the value of the DR should not be too large a proportion of the value of the fund as a whole;
2. The DR should be clearly bought as a profit or capital gain making investment with the definite intention of reselling it in the future;
3. Actual use of the DR should be limited and classified perhaps more as "potential sales promotion opportunities".
4. Over time, showing a history of trading, ie buying and selling some DR's at a profit would help a lot.

These are just some ideas and opinions that I have shared and not necessary gospel.

Buying a Chapuis, Merkel, Krieghoff, Searcy etc would be hard to justify as an investment due to their limited appreciation potential in the short and medium term. Buying a good 'vintage' DR at a reasonable price may work. I was told a story of some guys who bought brand new H&H's before the "factory" made a sizable price increase. They made instant profits of many thousands of dollars by immediately reselling their rifles.

A double rifle investment in a super fund would be looked at similar to buying artwork.

I actually discussed this with a fellow member last year who was interested in doing the same.

You should seek good expert tax advice on how to ensure your double rifle investment works and your fund continues to be a complying super fund. As the rules change almost every year, I may be out of date.

Good luck. It could work if approached and structured properly.


--------------------
John aka NitroX

...
Govt get out of our lives NOW!
"I love the smell of cordite in the morning."
"A Sharp spear needs no polish"

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375Brno
.333 member


Reged: 18/10/05
Posts: 354
Loc: Brisbane, Australia
Re: Superannuation = Double Rifle, would this work [Re: NitroX]
      #48349 - 28/01/06 11:18 PM

Nitrox

Thanks for taking the time to provide a detailed response. Looks like a lot of homework and checking before taking the big step. I'll think it thru and get some advice.

375Fetish

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500Nitro
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Reged: 06/01/03
Posts: 7244
Loc: Victoria, Australia
Re: Superannuation = Double Rifle, would this work [Re: 375Brno]
      #48350 - 29/01/06 12:05 AM


375Fetish

I think you are also limited to ? 15% ? for any one "asset" in a Super fund.
I think the %age is from the total value of the fund but you will
need to check with someone who knows and is up to date
with the ever changing rules !!!

Quite a few people do it - buy DR's using Superannuation.

500 Nitro

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NitroXAdministrator
.700 member


Reged: 25/12/02
Posts: 39885
Loc: Barossa Valley, South Australi...
Re: Superannuation = Double Rifle, would this work [Re: 500Nitro]
      #48363 - 29/01/06 03:10 AM

375Fetish

It is a good idea, and one I myself would consider oneday. My super funds are probably not large enough at the moment as I put a lot of funds into business instead.

I also have never trusted suoerannuation too much. The greedy paws of government never can resist taking more and more every now and again.

But having a asset which will appreciate and can be used in a wise manner now and again, like artwork or a double rifle, is certainly more enjoyable than a bank statement or share certificate.




--------------------
John aka NitroX

...
Govt get out of our lives NOW!
"I love the smell of cordite in the morning."
"A Sharp spear needs no polish"

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