ATO advice for SMSFs thinking about investing in crypto assets

The ATO recommends that trustees of self-managed super funds (‘SMSFs’) thinking about investing in crypto assets should 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, the ATO notes that some of these organisations are not licensed to provide financial advice, which 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, especially since trustees are ultimately responsible for ensuring the investment complies with the super and tax laws.

When investing in crypto assets, trustees must ensure it is allowed under the fund’s trust deed, is made in accordance with the fund’s investment strategy, and the trustee has 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 the trustee’s own personal or business assets.  This means the fund must have its own digital wallet, separate to any used by the trustee for personal or business purposes.
  • The investment is valued at market value in line with the ATO’s 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.

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Warren Kruger

Specialist Tax Consultant - “Helping YOU Pay The Correct Tax And Not A Penny More”. My story starts on Christmas Eve, back in 1983 in South Africa.

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