The ATO has specifically reminded advisers to ensure any cryptocurrency assets intended to be held by an SMSF reflect the correct and proper ownership credentials and documentation.
“One area I’d like to highlight today is the importance of ensuring that the crypto assets are owned by the fund and are held separately from the personal or business assets of the trustee,” ATO SMSF approved auditor portfolio director Paul Delahunty told delegates at the selfmanagedsuper SMSF Professionals Day 2022 held in Sydney recently.
To this end, Delahunty detailed the critical elements for proper proof of ownership an SMSF needs for cryptocurrencies.
“A fund must have its own digital wallet, separate to one used by the trustees for professional and business purposes. That wallet will have transaction listings for each separate crypto, which can be provided as evidence [of ownership],” he noted.
“Where an exchange is being utilised, trustees may also receive a report that can show the crypto holdings and [associated] value on a certain day.”
According to Delahunty, other items such as the account details and the email address being used for the crypto assets need to be related to the SMSF as well.
“[Further] bank records matching crypto fiat fund deposits and SMSF bank account outgoings for the investment [represent further fund ownership evidence],” he said.
“Finally, clean records that show the transaction led to crypto and how it aligns to the SMSF’s [trust] deed [is also useful ownership documentation].”
In addition, he noted the challenge cryptocurrencies present for SMSF auditors, emphasising the critical nature correct evidence of fund ownership will play from a compliance perspective.
“For SMSF auditors, evidence of proof of asset ownership for the purpose of being satisfied contravention of regulation 4.09A of the SIS (Superannuation Industry (Supervision)) Regulations hasn’t occurred can be tricky territory,” he said.
During the same presentation, he revealed how prevalent cryptocurrency assets are in the SMSF sector.
