SMSF trustees considering an investment in crypto assets should seek advice from a licensed financial adviser, according to the ATO, which noted unlicensed advice is not covered by consumer protection measures.
In an update on its website, the ATO noted that while there were some businesses that offered to help trustees set up a fund or use an existing SMSF to invest in crypto assets, not all were licensed to provide financial advice.
“This means the usual consumer protections and access to the Australian Financial Complaints Authority are not available for using these services,” it stated.
“There are many things to consider before deciding to invest in crypto assets so it’s important to get it right. In your role as trustee, you’re ultimately responsible for ensuring the investment complies with the super and tax laws.
“Remember, when investing in crypto assets, you must ensure it is allowed under the fund’s trust deed, is made in accordance with the fund’s investment strategy and you have considered the level of investment risk given the highly volatile nature of the investment.”
It added that as part of meeting their obligations, SMSF trustees investing in crypto assets must ensure the assets are owned by the fund, held separately from personal or business assets and held in a digital wallet owned by the fund.
Moreover, the assets should be valued at market value in line with the ATO’s valuation guidelines and any assets held by personal or related parties could not be transferred to the fund as a contribution.
The ATO also reminded SMSF trustees they are required to meet their tax obligations when buying, selling or investing in crypto assets.
Those transactions must take place on arm’s-length terms, and any income, such as staking rewards, must be reported in the SMSF annual return along with any capital gains or losses on the disposal of any assets.