Holding Cryptocurrency in an SMSF direct Advice From The ATO

I work for an Australian accounting business based on the Central Coast NSW. We have been pressing the ATO for a number of clarifications around the tax treatment of cryptocurrency..

Our latest issue we got a response on is this one :what is theATO'S view on holding cryptocurrency in an SMSF

The regulatory and taxation rules that apply to self-managed superannuation funds (SMSFs) do not specifically prohibit SMSF investment in cryptocurrencies.

However, the nature of cryptocurrencies may mean that compliance with the regulatory rules and restrictions that apply to all SMSF investments is more complex or difficult - for example, the requirement that the fund’s assets are managed separately from the member’s personal and business assets and ensuring that the SMSF has clear legal ownership of the cryptocurrency.

This means that you must maintain a separate cryptocurrency wallet for your SMSF from that used by the members or trustees personally. Evidence of separate ownership of a cryptocurrency wallet by your SMSF could be achieved by way of a declaration of trust by the SMSF trustee confirming that the cryptocurrency is held by the trustee on behalf of the SMSF.

Failure of SMSF trustees to be able to demonstrate clear ownership of cryptocurrency by their fund will result in a breach of the superannuation laws that require trustees to ensure that assets are clearly identifiable as being fund assets and separate from their personal assets.

As is always the case with any SMSF investment, SMSF trustees also need to ensure that an investment of this nature is consistent with their fund’s investment strategy and permitted by the trust deed.

We are considering issuing guidance on the regulatory implications of SMSFs holding cryptocurrencies. We strongly encourage SMSF trustees to seek independent professional advice before undertaking any new investment in their fund, including investments in cryptocurrencies.......... and we are happy to provide that independent professional advice Contact Fusion Partners Central Coast on 02 4367 3333 and ask for Daniel Harrison