Regulations make it more difficult for SMSFs to invest in Bitcoin: ATO

It is more difficult for SMSFs to invest in Bitcoin and other cryptocurrencies due to the superannuation regulations, says a senior member of the ATO.

James O’Halloran, ATO Deputy Commissioner for Superannuation, told the SMSF Association National Conference that the ATO had been receiving questions on the topic of SMSFs investing in cryptocurrencies.

“While the regulatory and tax laws that apply to SMSFs don’t specifically prohibit investment in Bitcoin or other cryptocurrencies, in addition to the tax considerations that arise, there are also super regulatory matters that must be considered by anyone contemplating investing in cryptocurrencies in their super fund,” he said.

“The nature of Bitcoin and other cryptocurrencies may mean that compliance with the regulatory rules and restrictions that apply to SMSF investments is more difficult – for example, the regulatory requirement that the fund’s assets are managed separately from the member’s personal and business assets and ensuring that the SMSF has clear legal ownership of the Bitcoin or relevant cryptocurrency, as well ensuring that the investment is appropriately valued for both accounting and tax purposes.”

Mr O’Halloran said that SMSF trustees needed to ensure that Bitcoin and cryptocurrency investments are consistent with their fund’s investment strategy, as is the case for any investment by an SMSF.

“We therefore strongly encourage SMSF trustees to seek independent professional advice before undertaking any new type of investment in their fund,” he said.

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