Cryptocurrencies in Self-Managed Super Funds: General Taxation Guidelines

Cryptocurrencies have been around for a number of years now, and more and more people are starting to use them as an investment option. One question that often comes up is how they should be taxed in self-managed super funds (SMSFs). In this article, we will explore the guidelines on cryptocurrency taxation in SMSFs set by the Australian Taxation Office (ATO).

Quick Word on SMSF in Crypto

A self managed super fund cryptocurrency is a superannuation fund where the members are also the trustees. This means that they have complete control over how the fund is managed and invested. SMSFs can invest in a wide range of assets, including property, shares, cash and term deposits. They can also invest in cryptocurrencies.

General Guidelines

As Cryptocurrencies are a new asset class, the ATO has not yet released specific guidance on how they should be taxed. However, they have released general guidance on the taxation of digital currencies, which can be applied to cryptocurrencies held in SMSFs.

Income from cryptocurrency investments will be taxed at the individual’s marginal tax rate. If the cryptocurrency is sold for a profit, then capital gains tax will apply. Cryptocurrencies that are purchased for personal use are not subject to capital gains tax but may be subject to GST.

For SMSFs, any income or capital gains from cryptocurrency investments will be taxed at 15%. This is the same as other investment assets, such as shares or any property held in an SMSF.

When it comes to taxation, cryptocurrencies held in SMSFs are treated the same as any other investment asset. This means that income and capital gains will be taxed at the standard rates. But as mentioned earlier, cryptocurrencies are a new asset class, and for now, the general guidance on digital currencies can be applied to cryptocurrencies held in SMSFs.

If you have any questions about how your cryptocurrency investments will be taxed, it’s always best to speak with a qualified accountant or tax advisor. They will be able to give you specific advice based on your individual circumstances.

Is Cryptocurrency Investing for Everyone?

Cryptocurrency investing is something anyone can consider getting into. But you should know that it can be a volatile and risky investment, and you should only invest if you are comfortable with this risk. 

If you’re thinking about investing in cryptocurrency, make sure you understand how it works and the risks involved before making any investments. As with anything, it’s best to come prepared before taking the plunge. Otherwise, you might encounter unimaginable issues down the line.

Summary

Cryptocurrencies in self-managed super funds are taxed in the same way as other investment assets. Income and capital gains from cryptocurrency investments will be taxed at the standard rates. The ATO has not yet released specific guidance on how cryptocurrencies should be taxed, but the general guidance on digital currencies can be applied to them. 

Do you hold any cryptocurrencies in your SMSF? Let us know in the comments below!

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