SMSFs on ATO’s radar in cryptocurrency review
As part of its review of transaction information from cryptocurrency service providers, the ATO has said that it will be using this data to ensure that SMSF trustees or members who invest in cryptocurrency are complying with their obligations.
In an online update, the ATO stated that it has started collecting customer and transaction information from designated cryptocurrency service providers, where individuals, businesses and SMSFs buy, sell and transfer cryptocurrency.
“We’ll collect this data and match it with taxpayer records to verify ‘purchase and sale’ information, to ensure people are meeting their tax obligations,” it said.
“We’ll then be able to identify SMSF trustees or members who may need help to understand their obligations, so we can provide further advice and guidance of the rules around the tax treatment of crypto assets.”
Following the data-matching exercise, the ATO said that it may contact taxpayers or SMSF members to verify the information it has collected. It said that it will provide individuals with at least 28 days to clarify any information.
“If you acquire or dispose of cryptocurrency, you must keep records of the transactions,” the Tax Office noted.
The ATO also warned SMSFs that cryptocurrency can be a high-risk, volatile investment.
“We’ve already seen incidences of SMSFs losing significant amounts of their retirement savings,” the ATO said.
“We strongly recommend all trustees undertake their own investigation and appropriate due diligence before investing with any organisation investing super assets into cryptocurrency holdings.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.