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By Webmaster
on 09 Oct 2018 11:55 PM

SMSF Investing in Cryptocurrency

In 2018 a common question asked by Self Managed Super Funds (SMSF) is "can I invest my super in cryptocurrency".

The Australian Tax Office declared that bitcoin and other cryptocurrencies like it are classed as capital gains tax assets. This ruling has further implications for self managed super funds investing in this asset class.

SMSF are permitted to buy cryptocurrencies provided they comply with certain conditions. The first is they must obviously keep records of cryptocurrency transactions. The investment must also be as follows:

SMSF Trust Deed

Cryptocurrencies, such as Bitcoin, Ethereum, Ripple and so on are capital gains tax assets and therefore any super fund may acquire, dispose of or invest in them as they would any other type of asset class.

When a fund engages in cryptocurrency transactions it must comply with the regulatory requirements that apply to investments in other assets and the trustees and members need to ensure it is allowed under the funds trust deed.

SMSF Investment Strategy

A self managed super funds investment strategy sets out the way in which the fund can make investments and what types of assets it can invest in.

Like any prudent investment strategy the SMSF's trustees and members need to assess the level of risk of a cryptocurrency investment since the asset class has been know to be quite volatile.

For this reason a review of the investment strategy and/or trust deed may be necessary for cryptocurrency transactions to be permitted.

SMSF Investing Super in Cryptocurrency

Cryptocurrency Valuation

A cryptocurrencies value must be in Australian dollars and will be the fair market value which can be obtained from a registered digital currency exchange website.

Since the value of coins and tokens change constantly the Australian Tax Office will accept the 30th June closing value.