If you’re a trustee of a self-managed super fund (SMSF) thinking about investing in crypto assets, we recommend you seek professional advice from a licensed financial adviser.
There are organisations who offer trustees help to set up a fund or use their existing fund to invest in crypto assets. However, some of these organisations are not licensed to provide financial advice.
This means the usual consumer protections and access to the Australian Financial Complaints Authority (AFCA) are not available for using these services.
There are many things to consider before deciding to invest in crypto assets so it’s important to get it right. In your role as trustee, you’re ultimately responsible for ensuring the investment complies with the super and tax laws.
Remember, when investing in crypto assets, you must ensure it is allowed under the fund’s trust deed, is made in accordance with the fund’s investment strategy and you have considered the level of investment risk given the highly volatile nature of the investment.
From a regulatory perspective it’s important that:
- The crypto assets are owned by the fund and are held separately from your own personal or business assets. This means the fund must have its own digital wallet, separate to any used by you for personal or business purposes.
- The investment is valued at market value in line with our valuation guidelines.
- Any crypto assets that a member or related party hold personally are not sold to the fund or transferred to the fund as a contribution.
- The investment is consistent with the sole purpose test, and does not involve the giving of financial assistance to a member.
From a tax perspective you also need to be aware of:
- Your tax responsibilities when buying, selling or investing in crypto assets which must be undertaken on arm’s length terms.
- The income tax consequences of common transactions involving crypto assets.
- As a crypto asset is a capital gains tax (CGT) asset, there are CGT implications when disposing of it. You need to work out if there is a capital gain or loss arising from the disposal, and report it on the SMSF tax return.
- Income associated with crypto assets that you hold, such as staking rewards, also needs to be reported on the return.
You must keep records of all transactions associated with acquiring, holding, and disposing of crypto assets.
The MoneySmartExternal Link section on ASIC’s website also has some useful information on investing in crypto assets including how to avoid scams.
Author
Kim Jay
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