Cryptocurrency and retirement, maybe a dream come true

You want to pay less tax and save for retirement, then superannuation is the place to be.  You could consider investing in cryptocurrency through a Self-Managed Superannuation Fund

Self-Managed Superannuation Fund

The sole purpose of superannuation is to provide you with financial support during your retirement. If you’re willing and able to take control of your superannuation, then you can choose to open a Self-Managed Superannuation Fund ("SMSF").

  • What is a SMSF?

    A Self-Managed Superannuation Fund is essentially an entity controlled by you whose sole reason for existing is to invest your superannuation with the goal of providing an income stream to you when you retire. A SMSF differs from an industry or retail superannuation fund because you are directly responsible for managing the superannuation fund. You make investment decisions and attend to tax reporting obligations.

  • Can a SMSF invest in cryptocurrency?

    Yes; an appropriately structured and managed Self-Managed Superannuation Fund can invest in cryptocurrency.

  • Who can have a SMSF?

    Most Australians can setup a Self-Managed Superannuation Fund, although it might not necessarily be in your best interest. Running a SMSF is an onerous task as you are responsible for making prudent investment decisions and must abide by strict regulations. The general industry rule of thumb is you need at least $200,000 in a SMSF for it to be worthwhile considering. This is because otherwise the administration costs may be prohibitive.

  • How do I set up a SMSF?

    Typically, the first step is for you to approach an accountant to discuss whether a Self-Managed Superannuation Fund is right for you. Financial regulations require the accountant to provide a Statement of Advice before proceeding with establishing a SMSF. Once the SMSF documentation is signed, you open a bank account and request your existing superannuation fund to transfer your superannuation interest to the SMSF. After your SMSF receives the money, it is your responsibility to begin investing it.

  • How is cryptocurrency taxed in a SMSF?

    On disposal of a cryptocurrency investment by a Self-Managed Superannuation Fund, the fund will have made a capital gain or loss. The gain is taxed at 15% unless the cryptocurrency was held for more than a year, in which case the tax rate could fall to 10%. Losses can be offset against gains made on other investments. However, if you are receiving a pension from the fund, the tax rate on gains could possibly fall to 0%.

    For a more detailed explanation see:

    How is cryptocurrency taxed within superannuation?
  • How does Munro’s help me with my SMSF?

    Together with helping establish a SMSF, Munro’s provides accountancy services for your SMSF. This includes preparation of the annual financial statements and income tax return. Every SMSF must be audited before lodging its annual tax return and we arrange this seamlessly for you. We also provide tax advice to ensure your fund remains compliant with regulations. If you’re going to invest in cryptocurrencies, then our specialist tax knowledge and experience in this field will be beneficial to you in respect to your reporting and regulatory compliance obligations. Note though, we are not financial advisors and cannot advise on the SMSF’s investment strategy – this is your responsibility as trustee of your SMSF.

Estate Planning

You may be wondering: what happens when I die? Well it depends on a number of factors including whether you own cryptocurrency personally, through a trust or company, or within superannuation. It also depends on whether or not you have a Will. Although you may rather not think about death, your loved ones will really appreciate it that you took the time to plan ahead as you may help them save tax.

  • Cryptocurrency outside superannuation

    Generally, ownership and control of your cryptocurrency following your death passes to your loved ones in accordance with your Will. If you don’t have a Will, then State law will determine who gets the cryptocurrency and this may not be what you wish for. If you don’t want to leave it up to State law or burden your loved ones with uncertainty and unnecessary taxes, then come speak to us about tax effective measures to include in your Will.

    For a more detailed explanation see:

    Is my cryptocurrency taxed when I die?
  • Cryptocurrency in superannuation

    Ordinarily the trustee of your superannuation fund will get to choose which of your dependents they pay your superannuation interest to after your passing. You can choose to lodge a “binding death benefit nomination” with the trustee of the superannuation fund which provides direction on how to disburse your superannuation interest following your death. For tax purposes, it may be more beneficial for you to direct payment to some of your loved ones compared to others. You may also have options before you die to arrange your affairs that’ll reduce tax after you pass. Accordingly, we suggest you speak with us to consider your situation and help us arrange a tax effective plan – leaving more for your loved ones and less for the government.

In many cases there is no more effective way to pay less tax than to invest within superannuation – the concessional tax rates are that good.

If you want to invest in cryptocurrency through a Self-Managed Superannuation Fund or want to implement a tax effective estate plan, then give us a call to explore your options.