Under current SMSF regulation, benefits are taxable at a rate of only 15%.
The only way to include cryptocurrency as part of your retirement portfolio is through a SMSF.
Investing in cryptocurrency has been observed as a good strategy to mitigate risk of unknown future volitity.
When it comes to investing in cryptocurrency, Australia provides a very generous tax structure to work within. One of the most popular choices for investors that want to include Bitcoin and other cryptocurrency within an investment strategy is the self managed super fund.
Now through an exclusive partnership with New Brighton Capital, SWYFTX is allowing SMSF-eligible investors to use our exchange to allocate cryptocurrency like Bitcoin into a retirement portfolio.
The legal stance of the ATO and the country of Australia is that Bitcoin is considered property. However, the technical status of Bitcoin insofar as taxes go will vary greatly depending on your particular circumstances.
Unlike retail or industry supers, an SMSF allows individuals to have more autonomy over asset choice and insurance. Assets that can be allocated to an SMSF include Bitcoin, other cryptocurrency and collectables such as wine and art.
In order to be compliant, funds must abide by regulations from the ATO, SISR, and SISA. All fund members should be aware of any changes to the law. Fund members are also required to maintain compliance due to the fact that all fund members are responsible for ensuring compliance themselves (even if they received help from a financial professional).
One of the largest benefits of a self managed super fund is the low concessional tax rate, which is at 15% for the current financial year which will end on 30 June. As many will notice, this tax rate is much lower than typical capital gains taxes. However, to be entitled to that tax rate, your SMSF must be classified as a complying fund. A non-complying super fund will receive the highest marginal tax rate allowed by law.
According to the Australia Tax Office (ATO), SMSFs are a type of retirement savings fund. Compared to other types of funds, SMSF members also serve as its trustees. As such, SMSF trust members maintain compliance with all ATO regulations like tax regulations and super laws. SMSF tax benefits make the investment vehicle a popular choice for cryptocurrency holders. Under current SMSF regulation, benefits are taxable at a rate of only 15%.
The only way to include cryptocurrency as part of your retirement portfolio is through a self managed super fund.
After you fill out a form with a SMSF cryptocurrency service provider such as New Brighton Capital, the SMSF trust members will have to wait for approval from the ATO.
Once the ATO approves the super, there are additional steps that members will have to take such as opening an account on a secure portal, opening a bank account, directing your super into your new SMSF, setting up a new trading account, and setting up data feeds.
The Trust deed is also a crucial part of the SMSF Bitcoin/Cryptocurrency process. The trust deed is a document that contains the rules through which a self managed super fund is governed. The fund’s trust deed also includes obligations, terms, and conditions of the trust.
More information about how to open an account can be found here on our partner’s website.
Since fund members are responsible for all fund decisions and compliance, risks are weighted heavier on the individual. The risks include low returns, and assumption of full responsibility even when life changes (e.g. losing your house or job). The death of a member also serves as a risk that can effect a fund’s status.
A sole purpose test is one of the compliance standards for any self managed super fund. The sole purpose test requires that funds can only be maintained for the exclusive purpose of providing fund members with retirement benefits. For example, if you have a piece of art in your fund, the art piece cannot be displayed at a member’s house.
A common complaint about SMSFs is the high number of ongoing costs that may be required for fund maintenance. According to MoneySmart.Gov.au, some of the costs for maintaining a SMSF cryptocurrency fund include:
Yes. You can rollover your fund from a pre-existing super into a cryptocurrency SMSF. As a result of a new and exclusive partnership with New Brighton Capital (NBC), we are currently offering a $250 cryptocurrency credit at SWYFTX when you set up an account with NBC. Funds can be rolled over from a pre-existing super or from your bank account. No matter what your investment strategy is, cryptocurrency is known to be a way to mitigate the risk of unknown future volatility in traditional markets.
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