Do digital assets need to be in the fund's name?

Fund assets must be kept separate from the trustees' personal assets. For digital assets that usually means accounts and wallets set up for the fund, with records that show the fund owns them.

Does holding digital assets affect the SMSF audit?

Every SMSF needs an annual audit by an approved SMSF auditor. The auditor will want evidence that digital assets exist, belong to the fund and are valued properly, which can take extra work.

Is an SMSF cheaper than a regular super fund?

It depends on the balance and the services used. SMSFs have largely fixed running costs, so they weigh more heavily on smaller balances. Our free SMSF cost calculator compares the two with your own numbers.

Who should I speak to about digital assets in my SMSF?

SMSF rules are complex and penalties for breaches can be significant. Trustees should get advice from a licensed financial adviser, and often an SMSF accountant, auditor or lawyer, before making decisions.

Self-managed super

Digital assets and SMSFs

What trustees of Australian self-managed super funds, and their advisers, research when digital assets come up: the sole purpose test, the investment strategy, custody and records, the audit and the costs.

SMSF rules are complex, they change, and trustees carry personal responsibility for getting them right. This page is general information to help you understand the questions. It is not a substitute for advice from a licensed financial adviser and the specialists who work with SMSFs.

Can an SMSF hold digital assets?

Superannuation law does not prohibit digital assets in a self-managed super fund. The question trustees face is not whether digital assets are allowed in principle, but whether a particular holding is permitted by the fund's trust deed, consistent with its investment strategy, held and recorded properly, and in the interests of the members' retirement.

Digital assets are high-growth, high-risk assets. Bitcoin's price has fallen by more than 70% more than once, and past performance is not a reliable indicator of future performance. For retirement savings, that volatility is central to the discussion.

The sole purpose test

The sole purpose test is the foundation of every SMSF. The fund must be maintained to provide retirement benefits to its members, or to their dependants if a member dies. Trustees and their relatives cannot use fund assets or gain a personal benefit from them before retirement.

For digital assets, this means fund holdings are kept apart from any personal holdings and are used only for the fund. Rules on dealing with related parties also limit buying assets from members or their associates, which is worth checking with a specialist before any transfer is considered.

The SMSF investment strategy

Trustees must prepare, regularly review and give effect to a written investment strategy. Under the superannuation regulations, it must consider, among other things, the risks and likely return of the fund's investments, diversification and the risks of inadequate diversification, liquidity, the fund's ability to pay benefits and costs, and whether to hold insurance for members.

No particular allocation automatically satisfies an auditor. What matters is that the strategy documents the trustees' reasoning, including how a volatile asset with unique custody, valuation and liquidity characteristics fits the fund's circumstances.

Custody, ownership and record-keeping

Fund assets must be held in a way that shows the fund owns them and keeps them separate from the trustees' own assets. With digital assets that usually means exchange accounts opened for the fund, or wallets set up and documented for the fund, rather than accounts in a trustee's personal name.

Trustees research how the fund would hold its keys, who could access them, and what would happen if a trustee lost capacity or died. They also keep records of every transaction, including dates, amounts and values in Australian dollars, and value fund assets at market value each year. Our page on digital assets and family legacy looks at access and inheritance in more depth.

The annual SMSF audit

Every SMSF must be audited each year by an approved SMSF auditor. For digital assets, the auditor will look for evidence that the assets exist, that the fund owns them and that the values reported are supported. Wallet addresses, exchange statements and clear transaction histories all help. Audits may take longer and cost more when digital assets are involved, so trustees often check this with their auditor in advance.

SMSF costs

An SMSF has setup costs and ongoing costs for administration, accounting, tax returns, the audit and the ATO supervisory levy. Because many of these are fixed, they make up a larger share of smaller balances. Leaving a large fund can also mean losing the insurance cover it provided, which may be costly or difficult to replace.

Our free SMSF cost calculator compares an SMSF's running costs with your current super fund's fees, using your own numbers. Our other free tools are on one page.

Learning more before speaking to an adviser

The course pathway includes extra guides for Australians, including material on self-managed super. For the basics of how different assets work, see digital assets explained. If you advise SMSF trustees, our page for financial professionals explains how the material can help you get up to speed.

Questions about digital assets in an SMSF

Can an SMSF hold digital assets?: Digital assets are not prohibited in an SMSF, but every investment must meet the sole purpose test, be allowed by the fund's trust deed and fit the fund's documented investment strategy.
What is the sole purpose test?: It is the requirement that an SMSF is maintained for the core purpose of providing retirement benefits to its members, or to their dependants if a member dies. Members cannot get a personal benefit from fund assets before retirement.
Do digital assets need to be in the fund's name?: Fund assets must be kept separate from the trustees' personal assets. For digital assets that usually means accounts and wallets set up for the fund, with records that show the fund owns them.
Does holding digital assets affect the SMSF audit?: Every SMSF needs an annual audit by an approved SMSF auditor. The auditor will want evidence that digital assets exist, belong to the fund and are valued properly, which can take extra work.
Is an SMSF cheaper than a regular super fund?: It depends on the balance and the services used. SMSFs have largely fixed running costs, so they weigh more heavily on smaller balances. Our free SMSF cost calculator compares the two with your own numbers.
Who should I speak to about digital assets in my SMSF?: SMSF rules are complex and penalties for breaches can be significant. Trustees should get advice from a licensed financial adviser, and often an SMSF accountant, auditor or lawyer, before making decisions.