ATO cautions trustees over cryptocurrency complexities

The ATO has warned SMSFs to ensure appropriate independent advice is sought before investing in cryptocurrencies as such investments could add to the compliance burden of the fund.

“The nature of bitcoin and other cryptocurrencies may mean that compliance with the regulatory rules and restrictions that apply to SMSF investments is more difficult,” ATO superannuation deputy commissioner James O’Halloran said.

“For example, the regulatory 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 bitcoin or relevant cryptocurrency, as well as ensuring that the investment is appropriately valued for both accounting and tax purposes.

“So, as is always the case with any SMSF investment, trustees need to ensure that an investment of this nature is consistent with the fund’s investment strategy. We strongly encourage SMSF trustees to seek independent professional advice [beforehand].”

O’Halloran revealed the tax office had received numerous inquiries regarding the subject of investing in cryptocurrencies within an SMSF.

“While the regulatory and tax laws that apply to the SMSFs don’t specifically prohibit investment in bitcoin or other cryptocurrencies, in addition to the tax considerations that arise, there are also super regulatory matters that must be considered by anyone contemplating investing in cryptocurrencies in their super fund,” he noted.


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