Yes, according to the Australian Taxation office:
While SMSFs are not prohibited from investing in cryptocurrencies, the investment must:
We strongly encourage SMSFs to seek independent professional advice before investing in crypto assets.
Read more on SMSF investing in crypto assets (ato.gov.au)
Yes. The law requires that SMSF cryptocurrency investments must be held and managed separately from the personal or business investments of trustees and members. This includes ensuring the SMSF has clear ownership of the cryptocurrency. This means the fund must maintain and provide evidence of a separate cryptocurrency wallet for the SMSF from that used personally by trustees and members.
Cryptocurrencies, such as Bitcoin, are CGT assets, and SMSFs may acquire, dispose of or invest in them as they would in any other asset. When an SMSF engages in these transactions, it must comply with the same regulatory requirements that apply to investments in other assets. It is important to understand that the investment decisions for your SMSF always remain with you as the SMSF trustee, giving you total control of your SMSF. You are under no obligation to invest in cryptocurrency if you elect not to do so, and the nature of cryptocurrency trading makes it high risk.
The main benefit of a complying fund SMSF is the low concessional tax rate of 15%. Long-term capital gains enjoy an effective tax rate of 10%.
Set-up is simple, but it is recommended to speak with your accountant or contact us and we can provide our recommended SMSF partners.
A requirement for SMSF is the sole purpose test. Cryptocurrency SMSF funds can only be maintained for the sole purpose of providing fund members with retirement or death benefits.
Read more about the sole purpose test (ato.gov.au)
You can invest in many digital assets, not cryptos exclusively. These include NFTs and common assets, such as gold and stocks.
To apply for a Clanz Entity account and manage your SMSF, you will need:
SMSF account holders can only deposit and withdraw funds in AUD from their registered SMSF bank account. Deposit and withdrawal in cryptocurrencies is not allowed for SMSF accounts. All cryptocurrencies must first be converted to AUD to allow withdrawals.
As a trustee of the SMSF, there are more weighted responsibilities on compliance, investment and risk.
Low or negative returns are a risk factor, but conversely high, positive returns can be seen. Any losses are carried forward until you make the losses back.
Running a SMSF involves ongoing accounting, levies, and annual fees with ASIC and the ATO.
Should there be a loss of money through theft or fraud, you won’t have access to any special compensation schemes or through the Superannuation Complaints Tribunal.