# Buying Physical Metals for your SMSF



## Ben L (30 July 2011)

Has anyone done this? Im looking to do this once I've set up my SMSF, please share any stories and experiences.

Thankyou.


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## Ben L (30 July 2011)

Just like to also ask how are the physical metals like gold and silver audited?


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## cynic (31 July 2011)

Ben L said:


> Just like to also ask how are the physical metals like gold and silver audited?






Ben L said:


> Has anyone done this? Im looking to do this once I've set up my SMSF, please share any stories and experiences.
> 
> Thankyou.




I recently noticed that one of the Australian Bullion Companies offers a service where one can buy PM's and allow them to remain in the safe keeping of the supplier (bullion company) rather than taking actual physical delivery. If I recall correctly there were some insurance and storage fees involved and the holdings were recorded on the customer's account. I'm not making any recommendations here - I just thought I'd share this discovery as I believe it might provide one possible solution for the facilitation of audit of PM holdings in SMSF's.

P.S. Whilst I only noticed one company - it doesn't mean that there aren't others offering this service. I'd be very surprised if their competitors weren't offering something similar. It's just that I happened to stumble across one when searching for some data.


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## Ben L (31 July 2011)

Thanks for your reply cynic, I heard something like that before. I prefer to hold the PM my self either in a bank safe deposit box.


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## Garpal Gumnut (31 July 2011)

I bought 20 oz gold many years ago, and had it in my SMSF for a while but my accountant made me take it out, something about being too difficult to account for. 

I made on it all as I sold it to the fund for lower than I bought, and bought it back for even lower.

Gold price has since gone ballistic, and I had a lot of capital gain in the fund. 

It remains safely stored.

gg


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## explod (31 July 2011)

Garpal Gumnut said:


> I bought 20 oz gold many years ago, and had it in my SMSF for a while but my accountant made me take it out, something about being too difficult to account for.
> 
> I made on it all as I sold it to the fund for lower than I bought, and bought it back for even lower.
> 
> ...




You need another Accountant GG, what a lot of rubbish. I have not had problems with pm,s in my super for about 9 years now.  Has to be properly inspected, now and again, for audit purposes but recently found that your own inspection declared by a sworn Statutory Declaration satisfies the Auditor, of course this includes documentation that the vault is active.

Had a mate the other day talking to the bank about taking money out of Term Deposit to buy gold and was told, "gee that's a bit risky".  He is doing it anyway.  The entire financial system hates bullion because there are no fees or interest to be made from it.


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## Garpal Gumnut (31 July 2011)

explod said:


> You need another Accountant GG, what a lot of rubbish. I have not had problems with pm,s in my super for about 9 years now.  Has to be properly inspected, now and again, for audit purposes but recently found that your own inspection declared by a sworn Statutory Declaration satisfies the Auditor, of course this includes documentation that the vault is active.
> 
> Had a mate the other day talking to the bank about taking money out of Term Deposit to buy gold and was told, "gee that's a bit risky".  He is doing it anyway.  The entire financial system hates bullion because there are no fees or interest to be made from it.




That's what he said, there are expenses with the auditor.

gg


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## tinhat (31 July 2011)

I haven't done this because the other trustee wouldn't agree to it, but I came close to buying some gold and silver for the SMSF in January. Was going to just buy a certificate through the Perth Mint, because it is government backed - so the WA government would have to go broke first. Not as safe as physically holding, but a level of risk that was acceptable to me.


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## Ben L (1 August 2011)

explod said:


> Has to be properly inspected, now and again, for audit purposes but recently found that your own inspection declared by a sworn Statutory Declaration satisfies the Auditor, of course this includes documentation that the vault is active.




How is this done exactly? 

Thanks in advance


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## explod (1 August 2011)

GG, my auditing cost is included in the overall for the activities of the Fund for the year and cost me about $350 per year.

Ben L.   My wife and I visit the vault, record time and date, obtain signiture from the Vault Keeper of the visit, inspect each piece and record serial numbers.  (Of course this is know previously but we do the excercise,  obtain a Statutory Declaration form (post office) then make a written statement on the form and attend a Court and have the Clerk verify and witness your signature under oath.  Then submit with the Vault Keepers note and reciept of vault fees to your accountant.

In the Great Depression Governments defaulted.  Worth reading a book on the economics of that period


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## jackson338 (14 August 2011)

You can use perthmint to buy physical gold or silver


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## jackson338 (1 September 2011)

Ben L said:


> Has anyone done this? Im looking to do this once I've set up my SMSF, please share any stories and experiences.
> 
> Thankyou.




Yes I have a few clients who has done this.  However you are not allow to in specie transfer your existing personal holdings in precious metals into your smsf.  They must be new purchases


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## jackson338 (1 September 2011)

Ben L said:


> Has anyone done this? Im looking to do this once I've set up my SMSF, please share any stories and experiences.
> 
> Thankyou.






Ben L said:


> Just like to also ask how are the physical metals like gold and silver audited?




I am an smsf auditor. Audited by sighting certificates of entitlement


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## explod (1 September 2011)

jackson338 said:


> I am an smsf auditor. Audited by sighting certificates of entitlement




Could you elaborate, what does a "certificate of entitlement" represent ?


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