The new Personal Property Security Act (PPSA) started on 30 January 2012.
This regime alters some of our established concepts of ownership. Owners of personal property like plant and equipment, motor vehicles, stock, artwork and collectables in the possession of others must now generally register their interest on the Personal Property Security Register (PPSR) or risk losing their title.
Three areas where this has a potentially serious impact, particularly for trustees of SMSFs, are where the trustees:
- lease personal property to another;
- place goods with another on consignment for sale; and
- have goods in storage.
While all entities with those arrangements need to be aware of the new registration requirements, trustees of SMSFs must also consider the compliance consequences of failing to register, particularly where the other party to the arrangement is a related entity.
This could result in the trustees not just losing the asset, but also facing a tax bill due to the non-compliance.
Click here for more information on PPSA.