Self-managed super funds exist to provide their members with a high degree of control over their retirement savings. Cryptocurrency touts an unparalleled level of autonomy for its users, so it makes complete sense that crypto-savvy individuals would want to work a crypto investment strategy into their long-term savings plans. The latest Australian Taxation Office (ATO) data also shows a steady increase in cryptocurrency assets held by SMSFs. As of the September quarter 2021, some $228 million was invested in the asset class, up from $212 million in the June quarter.
SMSF trustees have extensive administrative, reporting, and record-keeping obligations to ensure their fund complies with superannuation and taxation regulations. The ATO has approved the use of crypto in SMSFs, so SMSF advisers must stay across how best to keep records and reports for their cryptocurrency-based clients.
If done manually, cryptocurrency record-keeping can be an absolute nightmare. Depending on how, when, and where your client is transacting with cryptocurrency will dictate how complex the process of record-keeping will be. You could work with your client to keep a ledger in Excel with each relevant transaction, calculate the cost basis for each transaction, any fees associated… or you could use a crypto tax software like CryptoTaxCalculator. This software will give you and/or your client the ability to import data from any relevant source, and will automatically track and categorise cost base, fees, any gains or losses made and more.
If your client is interested in investing in cryptocurrency as part of their SMSF, you will need to confirm that the investment is:
- Allowed for under the fund’s trust deed
- Be in accordance with the fund’s investment strategy
- Comply with SISA and SISR regulatory requirements concerning investment restrictions.
For more information, you can read the ATO’s page concerning SMSFs and cryptocurrency investments here.
