Self-Managed Super Funds (SMSF) & Cryptocurrency

Self-Managed Super Funds (SMSFs) are the only way for Australians to include cryptocurrencies in their retirement portfolios.

SMSFs are managed by trustees who run the fund for their own benefit. Of note, each SMSF is required to adhere to super and tax laws laid out by the Australian Taxation Office (ATO).

To find out more, check out the Australian Tax Office’s Website and consult with your financial advisor or accountant before you make any decisions.

If you are interested in buying crypto using your SMSF with Kraken, you can sign up for an account at Kraken in the name of your SMSF, get verified for a business account, and start trading.

Current Tax Rate for Cryptocurrency SMSFs
Self-Managed Super Funds may be eligible for a 15% concessional tax rate. For SMSFs to benefit from investing in cryptocurrencies, crypto investments must be deemed permissible in the fund’s trust deed. The investments must also conform to the fund’s investment strategy and comply with regulatory requirements for investment restrictions. Please consult your financial advisor or accountant for more information. 

Types of Assets included in an SMSF
An SMSF allows a certain amount of autonomy in terms of investable asset classes. SMSF investment portfolios can include collectable assets such as art, wine, or antiques, and cryptocurrencies like Bitcoin and Ethereum. This gives members more flexibility than would be available through a retail super fund. Please be sure to consult your financial advisor or accountant for more information.

To ensure you are fulfilling the reporting requirements laid out by regulatory bodies, you must keep track of your crypto activity. When you trade crypto on Kraken, you have all of your transactions tracked and accounted for automatically, which makes it much easier to fulfill the ATO’s requirements.

Kraken’s website allows you to download your trade history in the form of a spreadsheet that you can send to your accountant.

When you transfer crypto assets out of Kraken’s exchange, be sure to keep detailed records of your transactions.

Cost is an important consideration when choosing whether or not to invest your retirement in a Self-Managed Super Fund. Maintaining an SMSF can get expensive as fees from third parties such as auditors, accountants, and financial advisors can add up. Further, at Kraken, standard trading and funding fees apply for SMSF accounts.

Check out Kraken’s fee structure and get an idea about how this may impact the cost of managing your fund.

An SMSF must adhere to the regulations laid out by the ATO and the Superannuation Industry (Supervision) Regulations (SISR).

Fund members are ultimately responsible for ensuring their SMSF is compliant, regardless of the advice received from a financial advisor.

Visit the ATO Superfund Website to ensure your SMSF is compliant, and seek help from a financial advisor or accountant.

Below, we'll explore the steps Australian clients will need to take in order to use their SMSF to invest in cryptocurrencies with Kraken.

First, to use your SMSF to invest in cryptocurrencies, you must create your Kraken account under your SMSF name and not your personal one.

Additionally, funds must be deposited from a bank account that is associated with your SMSF name.

Select “Get Verified” at the top right-hand corner of the screen.

A) When prompted, select “Business” as your account type, and then select “Verify” under Pro limits.

Once you become verified, you will be able to start trading crypto with your Self Managed Super Fund.

Click the button below to create your free Kraken account today!