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.