SMSF & Crypto Currency
Investing in crypto currency has been a hot topic since the beginning of this financial year, given the surge in Bitcoin between July 2020 and June 2021. Many SMSF Trustees have chosen to explore this mostly unknown investment class of digital currencies. Some think that it can yield a high return as capital gain - but many others think that Crypto is a high risk investment. The remunerative nature of digital currencies has also seen a rise in investors using their Self Managed Super Funds to invest in this asset class. However, the decentralized nature of the investment has raised concerns with the ATO, who have clearly stated that they will be cracking down on these type of investments with respect to the regulatory requirements of SMSF and the tax obligations it carries. Many investors stay away when it comes to putting their money into a speculative situation such as digital currencies, however there are many who have made fortunes. Good or bad, we need to learn how this investment class works and if you are an auditor, understand the in's and out's of it - so that you can manage the audit risks which goes with these types of non-standard investments.
Points to Note A few pointers for existing investors as well as new investors wanting to use their SMSF to invest in crypto currencies are listed below: - Cryptocurrencies are considered a CGT asset and will trigger capital gain tax if it attracts a profit and vice-versa - Many trust deeds & Investment Strategies do not allow the fund to invest in crypto currencies and hence could lead to a breach of SISA & SISR - Valuations on 30th June must adhere to SISA and ATO guidelines which say that the market value is to be obtained by a reputable digital currency exchange - Personal crypto wallets must be kept separate from the SMSF crypto wallet and the ownership must belong to the SMSF (which could be complicated given that the fund would need to satisfy Reg 4.09A - Seperation of asset) - a declaration of trust may be required. - Aquisition of assets from a related party - Section 66 of SISA - SMSF can not purchase crypto currency from a related party - Accounting and audit has its own challenges due to large fluctuations in the valuation from year end date 30th June to date of issue of audit report etc
FREE WEBINAR - 1 CPD hour Manoj Abichandani in his webinar will unmask all issues of an "SMSF investing in Crypto currencies" and what measures must be taken to safeguard the fund from breaching any SISA or SISR. Topic: "SMSF & Crypto Currency - Good or Bad! Don't Care - But how do I audit them?"
When: 5th October 2021 Time: 2.00 PM To 3.00 PM (AEST) How to Book: https://www.onlinesmsfaudit.com.au/BookWebinar.aspx or go to https://attendee.gotowebinar.com/register/5718632960748749328 Cost: Free - with our compliments CPD: 1 Hour CPD Certificate will be issued. This event will provide 1.0 Hours CPD hour under self assessment covered under RG 243.88 - 90 requirements. |
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