26 Mar SMSFs and Cryptocurrency
Although they are highly speculative, cryptocurrency have been popular amongst investors. With the general population have been finding ways to invest in cryptocurrency, a lot of people are wondering if they can invest in cryptocurrency using their super.
An SMSF is a private super fund that you manage yourself and is regulated by ATO. The trustees of an SMSF are responsible for making investment decisions as well as monitoring them to ensure they serve the best interests of members. Also, the investment decisions must comply with the SMSF’s investment strategy and be in accordance with superannuation law. To determine whether you can invest in cryptocurrency using super in SMSFs, two questions should be asked.
Does the SMSFs Trust deed allow investment in cryptocurrency?
SMSF’s trustees must assess investments in cryptocurrency in the same manner as any other investment. The trustees should consider following things:
Does SMSF’s trust deed authorises the investment
Risk appetite of the members and nature of investment
What is SMSF’s investment strategy and does cryptocurrency fits into it
How does the SMSF take and hold title to the asset
iAdvice have SMSF experts to assist you in your SMSFs trust deed to allow you to invest in cryptocurrency as well as setting up your SMSF.
Is it Prudent Superannuation Trustee?
Assuming that an SMSF may invest in cryptocurrency and has a suitable investment strategy, the next thing SMSFs trustee must consider is whether it is consistent with the trustee’s obligation to act as a prudent superannuation trustee. An example would be that cryptocurrencies are traded on exchange which are not well regulated nor transparent. Hence, when the time comes, will the cryptocurrency be able to realise its investment gains? At iAdvice, we assist SMSFs trustees ensuring they are acting as a prudent superannuation trustee. To book for an appointment, click on the icon below:
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