| Table of contents: Can an SMSF invest in Bitcoin? Checklist before buying Bitcoin with your SMSF Steps to buying Bitcoin with your SMSF Start investing in Bitcoin with your SMSF Frequently asked questions |
Can an SMSF buy Bitcoin?
Yes, SMSFs can invest in Bitcoin and other cryptocurrencies. But you’ll need to ensure:
- Your investment meets the sole purpose test (i.e., no personal benefit).
- The trust deed must allow crypto investments.
- Investment strategy must include Bitcoin or crypto (and justify the risk profile).
- No related-party transactions (i.e. your fund can’t buy Bitcoin from yourself or a relative).
- Separation of assets: crypto bought by the SMSF must be held in the fund’s name, not yours.
- Audit and tax records must be maintained annually.
We explain these steps further below. Otherwise, skip to the steps for buying Bitcoin with your SMSF.
Checklist before buying Bitcoin with your SMSF
- Your investment meets the sole purpose test (i.e., no personal benefit) ✅
SMSFs in Australia must pass the sole purpose test, which means all investments, including Bitcoin and crypto, are not for personal benefit. They should only be generating benefits for the SMSF fund itself.
- The trust deed allows crypto investments ✅
If your trust deed doesn’t currently allow for Bitcoin and investments, it may need to be updated with professional help.
- The investment strategy includes Bitcoin and crypto ✅
Your investment strategy documentation must:
- Allow your SMSF to buy and hold Bitcoin,
- Justify Bitcoin and crypto investments, considering risks profile, how well diversified the SMSF is across investment types, and expected returns.
Explore further details on investment strategy requirements.
- No related-party transactions ✅
You are not allowed to sell your personal Bitcoin to your SMSF (even at market price). This restriction also applies to family members, and anyone else connected to the fund.
- Separation of assets ✅
Crypto bought by the SMSF must be held in the SMSF’s name, not yours.
Using a dedicated wallet for SMSF holdings makes this easier. bitcoin.com.au makes SMSF investing simple by providing in-built exchange wallets connected to SMSF trading accounts.
- Proper records ✅
For annual audits by an approved SMSF auditor and tax reporting, your SMSF must keep:
- Transaction records
- Crypto wallet addresses
- Exchange statements
- Valuation reports
Note: Crypto transactions (e.g., buying, selling, or swapping) within an SMSF may trigger capital gains tax (CGT) events, which must be reported in the SMSF’s tax return.
Steps for buying Bitcoin with your SMSF
After ticking off the above compliance requirements, follow the steps below:
- Choose an AUSTRAC-registered exchange that supports SMSF accounts (such as bitcoin.com.au).
- Create your SMSF trading account. You’ll need to provide some documentation to create your SMSF account.
- Deposit Aussie dollars and start buying.
There are a wide range of ways to buy Bitcoin, including with:
Start investing in Bitcoin with your SMSF
Create your SMSF account with bitcoin.com.au today. Our support team are here to help with any questions.
Buying Bitcoin with your SMSF couldn’t be easier with bitcoin.com.au.
Frequently asked questions
What is a crypto SMSF?
There’s no such thing as a “crypto SMSF.” It’s just a regular Self-Managed Super Fund that chooses to invest in crypto like Bitcoin. It follows the same rules as any other SMSF.
What are the benefits of investing in Bitcoin as an SMSF?
An SMSF lets you choose exactly where your money goes, including property and crypto. This is not currently an option available with industry super funds.
SMSFs also offer tax benefits, making them attractive to long-term investors. We recommend speaking to a financial advisor to decide if an SMSF makes sense for your situation.
What is the best crypto platform for SMSFs?
Some of the best crypto exchanges for buying SMSFs include:
- bitcoin.com.au: Best for beginners looking for a seamless onboarding experience and full SMSF support.
- Independent Reserve: An excellent option for traders looking for advanced trading features and the 2024 Digital Exchange of the Year.
