Discover how Australian crypto investors are utilising self-managed super funds (SMSFs) to gain greater control over their retirement savings. In this episode, SMSF specialist Natalia Clack explains the benefits and risks of holding digital assets like Bitcoin in your super, how to do it compliantly, and what the proposed $3 million unrealised capital gains tax could mean for your future. Essential listening for anyone serious about managing their own retirement and crypto portfolio.
We cover:
If you’re an Australian investor serious about managing your retirement and incorporating crypto into your long-term strategy, this is a must-watch.
Contact Natalia at https://bit.ly/441p6Vr
We cover:
- What an SMSF is and who it suits
- How crypto can be stored compliantly within an SMSF
- What you can and can’t do with Bitcoin in your super
- The risks, compliance burdens, and audit requirements
- Why the $3M tax threshold could be devastating for some
- How to plan ahead, and whether family trusts may offer a better future path
If you’re an Australian investor serious about managing your retirement and incorporating crypto into your long-term strategy, this is a must-watch.
Contact Natalia at https://bit.ly/441p6Vr
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I have Natalia Clark joining me on this episode from
Easy super and we're going to go through a lot
of really key things around running your own self managed
super fun and why you could possibly benefit from this
by putting crypto into it. So we've got a lot
to cover here, and we'll also talk about this capital
(00:21):
gain TAC, this unrealized capital gains tax, which is absolutely insane.
But Natalia, welcome to the podcast.
Speaker 2 (00:29):
Hi Teita, thank you very much for inviting me. It's
my pleasure to be here.
Speaker 1 (00:33):
Everything all right, We've got a lot to cover here,
but first, can we start off with a bit of
an introduction about yourself and so we get that understanding
of who we're actually talking to here.
Speaker 2 (00:44):
I'm an SMSF accountant, SMSF specialist, SMSF auditor, and SMSF advisor.
SMSF stands for self Managed Superhiation Fund. I've been doing
smsfs for last twenty two years, and I'll be running
my own company, which is specialized in the semises for
(01:04):
the last twelve years.
Speaker 1 (01:07):
Wow. Okay, so we've definitely got a lot of experience here,
and I think for our international listeners, a super fund
here in Australia is very common. We've had them since
the nineties. But for the US listeners or international listeners,
it's essentially your four oh one K, So it's that
pension fund that you're putting away yourself so that you're
ready for retirement. And self managed super funds have this
(01:30):
interesting edge to them because you control exactly what goes
into them. So can we talk about what they actually
are and how crypto holders can be benefiting from this
and why they should be interested.
Speaker 2 (01:44):
That's right, So we've SMSs in Australia. We have the
compulsory supernation in Australia and it's been introduced in nineteen nineties.
Like you mentioned, so everyone who works in Australia and
so for the company, their employer is required to pay
(02:04):
percentage setain percentage of wages towards their superiation and discuperiation
is getting managed but by big funds, say like large
superiation funds, which are usually retail or the industry related
superiation funds. So where your money, your superiation will go
(02:27):
into your account. You cannot access this account until you're retired.
So there are fund managers who manage your superiation for you.
They decide where to invest money. They decide on what
to do with your money to grow your balance, to
grow your wealth. With self managed superiation fund it is
(02:49):
when you move your money from these large superiation providers
large funds into the small fund which you manage yourself,
so you will become a manager of your own supreation.
What it will give you. It will provide the opportunity
to make the investment decisions to invest in different asset classes.
(03:12):
And this is what I guess very interesting about how
Australians or they cannot access their supreiation until their retirement,
but they can manage and control their supreiation and in
that way they can make more money. Potentially they can
make more money than their money being managed by the
(03:33):
fund managers in the large superniation funds. And with cryptocurrency,
small self managed superiation funds are allowed to invest in cryptocurrency,
which is wonderful because this is how people can make
X returns instead of just making conservatively five or seven
(03:55):
percent per year. Because when you think about it, if
you're a fund manager and you're responsible for managing billions
of dollars. Actually, by the way, in Australia, supreiation funds
have trillions of dollars under their management. Yeah, so if
you fund manager and managing billions or billions of dollars,
(04:19):
would you take an extra risk? So you probably wouldn't,
So you wouldn't rest conservatively. It means you will deliver
a conservative return as well, which is usually wouldn't go
about five seven maximum ten percent per year. And your
returns will move with the market. If market is going up,
(04:42):
their returns will be up. If market is going down,
their returns will be done.
Speaker 1 (04:49):
Okay. So essentially the self management fund gives you that
level of control so you can decide where to invest
those particular funds. And it's really cool to see that
we can use it to purchased crypto and put crypto
assets into it. Is it a common thing? Like do
we see a lot of people with self managed super
funds having crypto in there?
Speaker 2 (05:10):
Or we started seeing people investing their supernation into crypta
In twenty seventeen, I was one of the pioneers in
Australia in terms of like accounting companies, a SMSs specialist
company and companies started dealing with crypto clients in the
first from twenty seventeen two twenty twenty two. In the
(05:33):
first five years of US doing crypto in MSS, we
didn't have a lot of interest. People were not that
interested in investing in crypta. As you remember, first of all,
it was bear market, then it was COVID, then bitcoin
and other cryptocurrency. It wasn't that widespread, So back then
(05:58):
it was not a lot of interest. However, in the
past two or three years, people started investing in crypto
currency a lot, especially in THEIRS, especially in Bitcoin and
top ten coins. And in the last twelve months, even
(06:20):
very conservative investors they are turning into crypto and they're
diversifying their portfolio. Say, for example, they already invested their
supernation in buying property or in shares. Now they are
looking to invest in crypta, potentially making more rewards, achieving
(06:43):
higher rewards, how higher results, and also diversifying in case
if shares are going down, people think, you know, crypto
will go up.
Speaker 1 (06:54):
Yeah, we've got all these trade wars, tariffs coming in play,
and we've seen the US markets crash dramatically because of it,
and a lot of people decide to go over to
other stocks such as gold and cryptocurrency to try and
write out that volatility. In the market, which is absolutely crazy.
So how are people actually storing their crypto in the
(07:17):
particular self managed super funds? Are they managing themselves? So
are they using cold wallets and how they like? If
they're holding crypto in their personal wallets, now can they
just put it into their self managed super funds?
Speaker 2 (07:31):
People? Obviously you need to open account on themsef name
with the exchange. So people would open the account with
the exchange in Australia or other seas exchange and they
will invest in crypto like again, so usually it's like
top ten points and they can keep it in the exchange. However,
(07:56):
there are a lot of people who consider it to
be too risky and they move it. They can move
it in cold storage or cold wallet or hot vallet
as long as they have proof evidence of existence of
these coins at thirtieth of June, and we usually talk
to people talk to our clients what exact evidence the
(08:19):
auditors would need. So as long as they can prove
that these coins existed at thirtieth of June each year,
they can use their colde wallet or hot vallet. Unfortunately,
if people have personal coins stored in the wallet and
they want to transfer personal coins into self Managed Superiation
(08:42):
Funds cold wallet. They cannot do that, so in order
to in order to transfer the coins, you have to
sell the coins in your personal name, which will result
in the capital gain or capital loss depends on if
it's a gain or loss, and then you have to
transsel the cash into Self Managed Variation Funds bank account
(09:05):
and then you can buy cryptocurrency on the SEMSS name.
So there one of the one of the main main, main,
main UH requirement for self managed Superiation fund is that
all these SMSF acids they have to be kept separate
from their personal assets. So SMSF has to have SMSs
(09:30):
bank account, SMSF has to have a separate cold wallet
forof points, any SEMSF has to open account in the
exchange on the SEMSFS name as well, so all the
assets they have to be kept separately and this is
the main requirement for their semsfs in Australia.
Speaker 1 (09:51):
Okay, there's a lot of headwork to do here, so
if you're interested in any of this stuff, I'd highly
recommend seeking a financial advice or someone such as Natali
here to guide you through this process. So it's quite
an involved process and you can't just open up a
exchange and start managing your own superfund there. So it's
(10:12):
very important to get this all set up correctly. Now
I want to know about some more of the downsides
to putting having a self manriaged superfund and also having
your crypto assets in there, and it will probably segue
into this three million dollar threshold for this unrealized capital
gains tax as well. But what are the downsides here
(10:32):
that we can see with a self managed superfund?
Speaker 2 (10:34):
Yeah, this is a very good question because SMSF is
not for everyone, and not everyone is ready for a SMOSEP.
There is a lot of compliance and you need to
understand the rules and legislation superhieation, legislation in order to
have your own AF. So again you need to have
(10:55):
the right advisor or the right accountant who can guide
you through self managed superiation funds rules. Sm sais will
require additional time, it's not set and forget structure. You
will need to manage your superiation. You will need to
make the decisions about your self managed superiation fund, about
(11:17):
your superiation. So it's very important to understand that you
will need to get some education or guidance from their
content or financial advisor. If we are talking about investment
advice in terms of the three million dollar proposed legislation,
(11:40):
which is unfortunately it's not the case of if, it's
the case of when. So we know that the new
legislation is proposed in Australia where if your balance is
in the superiation, if your balance is above three million
dollars as freshold, you will be taxed on unrealized capital gains.
(12:07):
And I know that SMSF Association which I'm a member of,
and other accounting boardies such as a CIPA Australia, CEA Australia,
they're trying to lit in against this tax because it
sounds very unfair and it is very unfair. However, I think,
(12:29):
I personally think that we will we will have to
find a way how we will deal with this tax
because like I said, I think it's not if. I
think it's when the tax will be in place for Australians.
So how the tax is going to work. Say, for example,
(12:51):
you have a balance at filter of June, and this
is the individual balance, it is not smsself balance. SMSF
can have up to six member members. So for example,
and usually some mersell would have two members, say husband
and wife, so each member can have up to three
million dollars in the balance, and they are not going
(13:16):
to get taxed if this member has under three million dollars. However,
if you balance at thirtieth of June will go above
three million dollars, then there is a tax additional tax
which you will be paying on unrealized capital gains. It
(13:37):
will be difference between the balance, say, for example, if
we have to calculate it four twenty twenty five twenty
twenty six financial year, we will look at the balance again,
your individual balance at thieirtieth of June twenty twenty six.
If it's about three million, say three point five million,
(13:57):
we will deduct a balance which you had a field
of June twenty twenty five the previous year, and we
will adjust it obviously for contributions and pensions, and then
we will have a difference, and this difference will be
unrealized unrealized capital gain, and this difference will be taxed
(14:21):
at the additional fifteen percent tax.
Speaker 1 (14:25):
Okay, thanks for clarifying that. I think a lot of
people in my previous video wanted to know if it
was the individual person within the funds or if it's
the fund itself. So thanks for clarifying that, and thanks
for clarifying exactly how the tax will actually work as well.
But what about a loss? So, for example, we can
put cryptocurrencies in there. Bitcoin during COVID went down to
(14:47):
like seven thousand per BDC. What about crypto losses? Will
the government give us a tax refund on unrealized losses? Here?
Speaker 2 (14:56):
Oh you wish you know a lie? Have you seen
government giving you anything back? Not quite exactly, So no
unrealized capital laws because you're right. For example, you had
the balance of five million and then it went down
(15:18):
to two million because of share of activities or cryptoval
activity for whatever reason. You will get unrealized capital laws which
you can carry forward, will carry forward to the following years. However,
you will not get every fund. So if you get
(15:41):
again in the years after, you know capital laws in
the following years, you can have set the capital laws
again capital future capital gates. However, you'll not get every fund.
So unfortunately, if you will not have a lot again
in the future years, then you'll just be sitting with
(16:02):
your loss. And like I said, government doesn't give you
back money government usually takes your money.
Speaker 1 (16:11):
All right, thanks for clarifying that. Okay, So no, no
refunds on capital gains unrealized capital gains losses, unfortunately. All right,
So how do people actually pay for these tax liabilities?
Speaker 2 (16:23):
Then?
Speaker 1 (16:24):
So I know a lot of self management funds have
properties in them and that's not liquid. It's very hard
to sell a property. So if there's a gain on
that property, and we're seeing prices in Sydney for example
here in Australia just skyrocket, so I could see that
possibly happening and pushing people over that three million threshold.
Cryptocurrency assets a little bit more liquid, we can sell
(16:45):
them on the market quite easily. But can we want
how do people pay for that liability if they have
an illiquid asset, and then how can they use the
superfund itself to actually pay for that liability?
Speaker 2 (16:59):
Yeah, this is an have a very good question which
we keep asking the government, especially if people have like
you said, people have property or a lot of farmers
they have farmland in the ASF. So if they need
to pay, yeah, if they need to pay and realize
capital gain, where will they get the money from? So?
(17:21):
Because this is uh, this is a tax on individual.
Etio will assess assess you when you lodge your tax return.
Lodges tax return and when you lodge individual tax return
and etio will send you assessment. You will have an
option to pay this tax from ASEF or to pay
(17:44):
these tax personally, So there will be an option. However,
you still have to have all the SLY money. You
still need to have cash somewhere inside of a s
or outside the SEMIS to pay the tax, but they
will be an option.
Speaker 1 (18:02):
Okay. I could see people diversifying their SMS efforts to
different types of assets. So if it's all property, that
probably go into something a little bit more liquid and
have more cash in there to actually pay for these
liabilities if they're over that high threshold. Pretty interesting stuff. Okay.
Now I wanted to circle back a little bit and
(18:23):
to ask a question that came up in a bitcoin
meetup that I was out a couple of weeks ago,
and this was about leveraging the value of your self
marriage superfund so you can take a loan against it.
So they were talking about a way to utilize your bitcoin.
(18:44):
So if you have a lot of bitcoin in there,
could you use that self managed superfund as a collateral
for a loan, so you can make that bitcoin a
little bit more liquid, especially if you're holding onto that
bitcoin for a really long time and I never want
to sell it. This might be a way to unlock
that potential value. Is that possible with a self measured superfund?
Speaker 2 (19:07):
Unfortunately no, it will reach superiation laws again, so ass
are not allowed to borrow and you cannot you know,
borrow against the assets as well. So the only way
to borrow on a SMSF is when you want to
buy a property and you can borrow against that property,
(19:30):
but you cannot borrow against your cryptocurrency if you have
cryptocurrency bitcoins in a SEMIF, which is why margin trading
is not allowed in a self managed superiation fund. This
will be another breach if someone is doing it, so
this will be another bridge, So please be careful and
(19:52):
you need to understand the rules. Like I said before,
you need to understand the rules about a SMOSF. So
this is a great opportunity, but without knowing the rules,
it could be you can end up in a great disaster.
Speaker 1 (20:07):
Okay, I think a couple of people here might need
to read up of the rules, so it might bring
that to attention. Okay, Now, another thing that people were
worried about with this three million threshold was that it
wasn't being indexed or it didn't look like it within
this particular bill. Is this being indexed for inflation or
(20:28):
is it kind of vague like what's happening here?
Speaker 2 (20:31):
No, this is there. This is one of the issues.
I mean, there are many issues with this tax bill,
but one of the issues it's not indexed. Potentially, potentially
it could get indexed, but it's a come again, it
has to go from the Parliament. It's a change in
the bill. Tax bill. As you know, it's not as
(20:52):
it's not easy to change the law when it's already
a law. So unfortunately, in the current proposal there is
no indexation. What it means. It means that we all
know that the dollar today is not the same as
a dollar tomorrow. So dollar tomorrow is cheaper in terms
(21:13):
of the buying capacity than dollar today. So it means
that in ten or twenty years, three million dollar threshold
is going to be like one million in today's dollars.
So what again, What it means? It means that today,
for example, only half a million Australians according to the government,
(21:36):
again half a million Australians are affected by the tax. However,
in ten years it's going to be much much more
Australians being affected by the tax because it's of index again,
because the dollar in ten years it's not the same,
it's not going to be worth the same like dollar today.
In twenty years almost may be like every second Australian
(21:59):
is going to be affected by the tax again unless
government will index and increase the threshold. However, we have Greens.
Greens are talking about reducing actually three million dollar threshold
to two million dollar threshold. So yeah, we do have
(22:20):
a lot of you know, things going on in terms
of and different opinions and different lobbies. Some lobbies are
against these tax and some lobbyies again for example, Greens
want the threshold to become two million dollar thresholds because
they reckon if you have two million in supernation, then
(22:44):
you're already rich or wealthy and you should pay extra
tax on your money.
Speaker 1 (22:53):
Well, yeah, two million in you superannuation is quite a lot.
It's that rainy day fund that you're putting money away into,
not your savings account or your other investments or even
your family trust or whatever you might have. So it's
it is quite a decent amount of money, so they
might have a point there, but still I really do
feel like this is overreached by the government, especially without
(23:15):
that indexing, because they'll encroach on more Australians because of
the inflation and whatnot. Like you mentioned, so really interesting
stuff here. Now I probably should guide people to an
accountant or a financial advisor for this particular question here,
but I'd like to know are there other ways around
(23:38):
this three million threshold, people moving money around, setting up
a family trust or discretionary trust or anything like that
to try and avoid this impact of the new bill.
Speaker 2 (23:54):
At the moment, superiation and the self managed Superiation Fund
is the more tax concession of structure in Australia. So
in AMERSEF for people who don't know, in ASEF you
pay maximum fifteen percent tax and potentially after retirement you
pay zero tax. Unfortunately, with these tacks, ASSEF is going
(24:19):
to become less attractive, especially for people who do work
hard and work hard all their lives and accumulated amount
greater than three million. The other structures will become more
attractive from tax point of view, and like you said,
family trust, come even company will become more attractive than
(24:43):
self managed superniation funds. And this is I'm a little
bit sad about it because you know, we all know
that Supernation will set up for Australians to say, for
their retirement, so they are self funded. They don't rely
on the government pension, on the age pension. And we
(25:06):
were promised in ninety I think ninety seven by John
Howard that it was promised by Liberals, but it was
promised that superiation is not going to be taxed. However
government changed, the government changed and the view on superniation changed.
So I feel like a lot of people are getting
(25:28):
ripped off by the tax, especially people again who've been
saving and contributing additional money into Supernation environment because they're
thinking about their retirement, because they're saving money for their
retirement and then by the end of their working life
(25:48):
and now they have the tacks and say they're in
their fifties or sixties and they have the tax which
they have to pay, and I think it's very very
un fair. So unfortunately, the semisp will become less attractive
for quite a number of people, and people will move
(26:09):
their money to our structures. Family trust discretion trust companies
where attacks will be less than this particular tas.
Speaker 1 (26:24):
Okay, sounds like a lot of people accountants in particular,
are going to win out from this change if it
does go through. So we'll see how things fall into
place over the next couple of months. Right, So we've
got a lot of information here to go through. I
think it's answered a lot of people's questions in regards
to self manage super funds, which is absolutely fantastic. So Natalia,
(26:47):
thank you so much for joining me on the podcast
episode and talking us through everything we need to know,
especially for all the crypto holders here that are interested
in this kind of thing. How can we find out more?
Where do we go to reach out to you and
find out how to set up the self manage superfund?
Speaker 2 (27:03):
No, thank you Peter for inviting me, so I almost
always have you to share my knowledge with people. And
if you want to find out more or about self
managed superiation funds, or if you need more guidance on
how to invest your money in a self managed superiation fund,
you can go and book an appointment with myself. You
(27:26):
can go on website www dot SMSF Consulting dot com
dot ail. We have a free fifteen minutes appointment available
and this is where we can start. I can find
out a little bit more about yourself and I can
assist you with fast and quick questions. Always if you
(27:47):
are looking for an accountent or looking for a SMSLF
specialist advisor who can guide you and hold your hand
during your superiation, investment and journey again, you're welcome to
move to easy super and we can assist you awesome.
Speaker 1 (28:05):
Thank you so much. So if you have any questions,
leave them down below as well. The comment section will
afford them all over to Natalia as well, so she
can help answer those particular questions. And if you want
to find out anything else, I'll leave all the links
in the video description down below so you can contact
Natalia and find out a little bit more about how
(28:27):
to sell a super fund. But Metalia, thank you so
much for joining me on this episode. It's been a
pleasure talking to you.
Speaker 2 (28:33):
Thank you very much. Peter, thank you for inviting me.
Speaker 3 (28:36):
You gotta do it like that you've been listening to
the Learned card down or podcast Gotta get It Hi
Crypto is what we like. But this is that investment
or financial advice gotta do your research because it's risky.
We know where it is. This show is education on Lesten.
Crypto is the future really? It ain't, No debrad
I have Natalia Clark joining me on this episode from
Easy super and we're going to go through a lot
of really key things around running your own self managed
super fun and why you could possibly benefit from this
by putting crypto into it. So we've got a lot
to cover here, and we'll also talk about this capital
(00:21):
gain TAC, this unrealized capital gains tax, which is absolutely insane.
But Natalia, welcome to the podcast.
Speaker 2 (00:29):
Hi Teita, thank you very much for inviting me. It's
my pleasure to be here.
Speaker 1 (00:33):
Everything all right, We've got a lot to cover here,
but first, can we start off with a bit of
an introduction about yourself and so we get that understanding
of who we're actually talking to here.
Speaker 2 (00:44):
I'm an SMSF accountant, SMSF specialist, SMSF auditor, and SMSF advisor.
SMSF stands for self Managed Superhiation Fund. I've been doing
smsfs for last twenty two years, and I'll be running
my own company, which is specialized in the semises for
(01:04):
the last twelve years.
Speaker 1 (01:07):
Wow. Okay, so we've definitely got a lot of experience here,
and I think for our international listeners, a super fund
here in Australia is very common. We've had them since
the nineties. But for the US listeners or international listeners,
it's essentially your four oh one K, So it's that
pension fund that you're putting away yourself so that you're
ready for retirement. And self managed super funds have this
(01:30):
interesting edge to them because you control exactly what goes
into them. So can we talk about what they actually
are and how crypto holders can be benefiting from this
and why they should be interested.
Speaker 2 (01:44):
That's right, So we've SMSs in Australia. We have the
compulsory supernation in Australia and it's been introduced in nineteen nineties.
Like you mentioned, so everyone who works in Australia and
so for the company, their employer is required to pay
(02:04):
percentage setain percentage of wages towards their superiation and discuperiation
is getting managed but by big funds, say like large
superiation funds, which are usually retail or the industry related
superiation funds. So where your money, your superiation will go
(02:27):
into your account. You cannot access this account until you're retired.
So there are fund managers who manage your superiation for you.
They decide where to invest money. They decide on what
to do with your money to grow your balance, to
grow your wealth. With self managed superiation fund it is
(02:49):
when you move your money from these large superiation providers
large funds into the small fund which you manage yourself,
so you will become a manager of your own supreation.
What it will give you. It will provide the opportunity
to make the investment decisions to invest in different asset classes.
(03:12):
And this is what I guess very interesting about how
Australians or they cannot access their supreiation until their retirement,
but they can manage and control their supreiation and in
that way they can make more money. Potentially they can
make more money than their money being managed by the
(03:33):
fund managers in the large superniation funds. And with cryptocurrency,
small self managed superiation funds are allowed to invest in cryptocurrency,
which is wonderful because this is how people can make
X returns instead of just making conservatively five or seven
(03:55):
percent per year. Because when you think about it, if
you're a fund manager and you're responsible for managing billions
of dollars. Actually, by the way, in Australia, supreiation funds
have trillions of dollars under their management. Yeah, so if
you fund manager and managing billions or billions of dollars,
(04:19):
would you take an extra risk? So you probably wouldn't,
So you wouldn't rest conservatively. It means you will deliver
a conservative return as well, which is usually wouldn't go
about five seven maximum ten percent per year. And your
returns will move with the market. If market is going up,
(04:42):
their returns will be up. If market is going down,
their returns will be done.
Speaker 1 (04:49):
Okay. So essentially the self management fund gives you that
level of control so you can decide where to invest
those particular funds. And it's really cool to see that
we can use it to purchased crypto and put crypto
assets into it. Is it a common thing? Like do
we see a lot of people with self managed super
funds having crypto in there?
Speaker 2 (05:10):
Or we started seeing people investing their supernation into crypta
In twenty seventeen, I was one of the pioneers in
Australia in terms of like accounting companies, a SMSs specialist
company and companies started dealing with crypto clients in the
first from twenty seventeen two twenty twenty two. In the
(05:33):
first five years of US doing crypto in MSS, we
didn't have a lot of interest. People were not that
interested in investing in crypta. As you remember, first of all,
it was bear market, then it was COVID, then bitcoin
and other cryptocurrency. It wasn't that widespread, So back then
(05:58):
it was not a lot of interest. However, in the
past two or three years, people started investing in crypto
currency a lot, especially in THEIRS, especially in Bitcoin and
top ten coins. And in the last twelve months, even
(06:20):
very conservative investors they are turning into crypto and they're
diversifying their portfolio. Say, for example, they already invested their
supernation in buying property or in shares. Now they are
looking to invest in crypta, potentially making more rewards, achieving
(06:43):
higher rewards, how higher results, and also diversifying in case
if shares are going down, people think, you know, crypto
will go up.
Speaker 1 (06:54):
Yeah, we've got all these trade wars, tariffs coming in play,
and we've seen the US markets crash dramatically because of it,
and a lot of people decide to go over to
other stocks such as gold and cryptocurrency to try and
write out that volatility. In the market, which is absolutely crazy.
So how are people actually storing their crypto in the
(07:17):
particular self managed super funds? Are they managing themselves? So
are they using cold wallets and how they like? If
they're holding crypto in their personal wallets, now can they
just put it into their self managed super funds?
Speaker 2 (07:31):
People? Obviously you need to open account on themsef name
with the exchange. So people would open the account with
the exchange in Australia or other seas exchange and they
will invest in crypto like again, so usually it's like
top ten points and they can keep it in the exchange. However,
(07:56):
there are a lot of people who consider it to
be too risky and they move it. They can move
it in cold storage or cold wallet or hot vallet
as long as they have proof evidence of existence of
these coins at thirtieth of June, and we usually talk
to people talk to our clients what exact evidence the
(08:19):
auditors would need. So as long as they can prove
that these coins existed at thirtieth of June each year,
they can use their colde wallet or hot vallet. Unfortunately,
if people have personal coins stored in the wallet and
they want to transfer personal coins into self Managed Superiation
(08:42):
Funds cold wallet. They cannot do that, so in order
to in order to transfer the coins, you have to
sell the coins in your personal name, which will result
in the capital gain or capital loss depends on if
it's a gain or loss, and then you have to
transsel the cash into Self Managed Variation Funds bank account
(09:05):
and then you can buy cryptocurrency on the SEMSS name.
So there one of the one of the main main, main,
main UH requirement for self managed Superiation fund is that
all these SMSF acids they have to be kept separate
from their personal assets. So SMSF has to have SMSs
(09:30):
bank account, SMSF has to have a separate cold wallet
forof points, any SEMSF has to open account in the
exchange on the SEMSFS name as well, so all the
assets they have to be kept separately and this is
the main requirement for their semsfs in Australia.
Speaker 1 (09:51):
Okay, there's a lot of headwork to do here, so
if you're interested in any of this stuff, I'd highly
recommend seeking a financial advice or someone such as Natali
here to guide you through this process. So it's quite
an involved process and you can't just open up a
exchange and start managing your own superfund there. So it's
(10:12):
very important to get this all set up correctly. Now
I want to know about some more of the downsides
to putting having a self manriaged superfund and also having
your crypto assets in there, and it will probably segue
into this three million dollar threshold for this unrealized capital
gains tax as well. But what are the downsides here
(10:32):
that we can see with a self managed superfund?
Speaker 2 (10:34):
Yeah, this is a very good question because SMSF is
not for everyone, and not everyone is ready for a SMOSEP.
There is a lot of compliance and you need to
understand the rules and legislation superhieation, legislation in order to
have your own AF. So again you need to have
(10:55):
the right advisor or the right accountant who can guide
you through self managed superiation funds rules. Sm sais will
require additional time, it's not set and forget structure. You
will need to manage your superiation. You will need to
make the decisions about your self managed superiation fund, about
(11:17):
your superiation. So it's very important to understand that you
will need to get some education or guidance from their
content or financial advisor. If we are talking about investment
advice in terms of the three million dollar proposed legislation,
(11:40):
which is unfortunately it's not the case of if, it's
the case of when. So we know that the new
legislation is proposed in Australia where if your balance is
in the superiation, if your balance is above three million
dollars as freshold, you will be taxed on unrealized capital gains.
(12:07):
And I know that SMSF Association which I'm a member of,
and other accounting boardies such as a CIPA Australia, CEA Australia,
they're trying to lit in against this tax because it
sounds very unfair and it is very unfair. However, I think,
(12:29):
I personally think that we will we will have to
find a way how we will deal with this tax
because like I said, I think it's not if. I
think it's when the tax will be in place for Australians.
So how the tax is going to work. Say, for example,
(12:51):
you have a balance at filter of June, and this
is the individual balance, it is not smsself balance. SMSF
can have up to six member members. So for example,
and usually some mersell would have two members, say husband
and wife, so each member can have up to three
million dollars in the balance, and they are not going
(13:16):
to get taxed if this member has under three million dollars. However,
if you balance at thirtieth of June will go above
three million dollars, then there is a tax additional tax
which you will be paying on unrealized capital gains. It
(13:37):
will be difference between the balance, say, for example, if
we have to calculate it four twenty twenty five twenty
twenty six financial year, we will look at the balance again,
your individual balance at thieirtieth of June twenty twenty six.
If it's about three million, say three point five million,
(13:57):
we will deduct a balance which you had a field
of June twenty twenty five the previous year, and we
will adjust it obviously for contributions and pensions, and then
we will have a difference, and this difference will be
unrealized unrealized capital gain, and this difference will be taxed
(14:21):
at the additional fifteen percent tax.
Speaker 1 (14:25):
Okay, thanks for clarifying that. I think a lot of
people in my previous video wanted to know if it
was the individual person within the funds or if it's
the fund itself. So thanks for clarifying that, and thanks
for clarifying exactly how the tax will actually work as well.
But what about a loss? So, for example, we can
put cryptocurrencies in there. Bitcoin during COVID went down to
(14:47):
like seven thousand per BDC. What about crypto losses? Will
the government give us a tax refund on unrealized losses? Here?
Speaker 2 (14:56):
Oh you wish you know a lie? Have you seen
government giving you anything back? Not quite exactly, So no
unrealized capital laws because you're right. For example, you had
the balance of five million and then it went down
(15:18):
to two million because of share of activities or cryptoval
activity for whatever reason. You will get unrealized capital laws which
you can carry forward, will carry forward to the following years. However,
you will not get every fund. So if you get
(15:41):
again in the years after, you know capital laws in
the following years, you can have set the capital laws
again capital future capital gates. However, you'll not get every fund.
So unfortunately, if you will not have a lot again
in the future years, then you'll just be sitting with
(16:02):
your loss. And like I said, government doesn't give you
back money government usually takes your money.
Speaker 1 (16:11):
All right, thanks for clarifying that. Okay, So no, no
refunds on capital gains unrealized capital gains losses, unfortunately. All right,
So how do people actually pay for these tax liabilities?
Speaker 2 (16:23):
Then?
Speaker 1 (16:24):
So I know a lot of self management funds have
properties in them and that's not liquid. It's very hard
to sell a property. So if there's a gain on
that property, and we're seeing prices in Sydney for example
here in Australia just skyrocket, so I could see that
possibly happening and pushing people over that three million threshold.
Cryptocurrency assets a little bit more liquid, we can sell
(16:45):
them on the market quite easily. But can we want
how do people pay for that liability if they have
an illiquid asset, and then how can they use the
superfund itself to actually pay for that liability?
Speaker 2 (16:59):
Yeah, this is an have a very good question which
we keep asking the government, especially if people have like
you said, people have property or a lot of farmers
they have farmland in the ASF. So if they need
to pay, yeah, if they need to pay and realize
capital gain, where will they get the money from? So?
(17:21):
Because this is uh, this is a tax on individual.
Etio will assess assess you when you lodge your tax return.
Lodges tax return and when you lodge individual tax return
and etio will send you assessment. You will have an
option to pay this tax from ASEF or to pay
(17:44):
these tax personally, So there will be an option. However,
you still have to have all the SLY money. You
still need to have cash somewhere inside of a s
or outside the SEMIS to pay the tax, but they
will be an option.
Speaker 1 (18:02):
Okay. I could see people diversifying their SMS efforts to
different types of assets. So if it's all property, that
probably go into something a little bit more liquid and
have more cash in there to actually pay for these
liabilities if they're over that high threshold. Pretty interesting stuff. Okay.
Now I wanted to circle back a little bit and
(18:23):
to ask a question that came up in a bitcoin
meetup that I was out a couple of weeks ago,
and this was about leveraging the value of your self
marriage superfund so you can take a loan against it.
So they were talking about a way to utilize your bitcoin.
(18:44):
So if you have a lot of bitcoin in there,
could you use that self managed superfund as a collateral
for a loan, so you can make that bitcoin a
little bit more liquid, especially if you're holding onto that
bitcoin for a really long time and I never want
to sell it. This might be a way to unlock
that potential value. Is that possible with a self measured superfund?
Speaker 2 (19:07):
Unfortunately no, it will reach superiation laws again, so ass
are not allowed to borrow and you cannot you know,
borrow against the assets as well. So the only way
to borrow on a SMSF is when you want to
buy a property and you can borrow against that property,
(19:30):
but you cannot borrow against your cryptocurrency if you have
cryptocurrency bitcoins in a SEMIF, which is why margin trading
is not allowed in a self managed superiation fund. This
will be another breach if someone is doing it, so
this will be another bridge, So please be careful and
(19:52):
you need to understand the rules. Like I said before,
you need to understand the rules about a SMOSF. So
this is a great opportunity, but without knowing the rules,
it could be you can end up in a great disaster.
Speaker 1 (20:07):
Okay, I think a couple of people here might need
to read up of the rules, so it might bring
that to attention. Okay, Now, another thing that people were
worried about with this three million threshold was that it
wasn't being indexed or it didn't look like it within
this particular bill. Is this being indexed for inflation or
(20:28):
is it kind of vague like what's happening here?
Speaker 2 (20:31):
No, this is there. This is one of the issues.
I mean, there are many issues with this tax bill,
but one of the issues it's not indexed. Potentially, potentially
it could get indexed, but it's a come again, it
has to go from the Parliament. It's a change in
the bill. Tax bill. As you know, it's not as
(20:52):
it's not easy to change the law when it's already
a law. So unfortunately, in the current proposal there is
no indexation. What it means. It means that we all
know that the dollar today is not the same as
a dollar tomorrow. So dollar tomorrow is cheaper in terms
(21:13):
of the buying capacity than dollar today. So it means
that in ten or twenty years, three million dollar threshold
is going to be like one million in today's dollars.
So what again, What it means? It means that today,
for example, only half a million Australians according to the government,
(21:36):
again half a million Australians are affected by the tax. However,
in ten years it's going to be much much more
Australians being affected by the tax because it's of index again,
because the dollar in ten years it's not the same,
it's not going to be worth the same like dollar today.
In twenty years almost may be like every second Australian
(21:59):
is going to be affected by the tax again unless
government will index and increase the threshold. However, we have Greens.
Greens are talking about reducing actually three million dollar threshold
to two million dollar threshold. So yeah, we do have
(22:20):
a lot of you know, things going on in terms
of and different opinions and different lobbies. Some lobbies are
against these tax and some lobbyies again for example, Greens
want the threshold to become two million dollar thresholds because
they reckon if you have two million in supernation, then
(22:44):
you're already rich or wealthy and you should pay extra
tax on your money.
Speaker 1 (22:53):
Well, yeah, two million in you superannuation is quite a lot.
It's that rainy day fund that you're putting money away into,
not your savings account or your other investments or even
your family trust or whatever you might have. So it's
it is quite a decent amount of money, so they
might have a point there, but still I really do
feel like this is overreached by the government, especially without
(23:15):
that indexing, because they'll encroach on more Australians because of
the inflation and whatnot. Like you mentioned, so really interesting
stuff here. Now I probably should guide people to an
accountant or a financial advisor for this particular question here,
but I'd like to know are there other ways around
(23:38):
this three million threshold, people moving money around, setting up
a family trust or discretionary trust or anything like that
to try and avoid this impact of the new bill.
Speaker 2 (23:54):
At the moment, superiation and the self managed Superiation Fund
is the more tax concession of structure in Australia. So
in AMERSEF for people who don't know, in ASEF you
pay maximum fifteen percent tax and potentially after retirement you
pay zero tax. Unfortunately, with these tacks, ASSEF is going
(24:19):
to become less attractive, especially for people who do work
hard and work hard all their lives and accumulated amount
greater than three million. The other structures will become more
attractive from tax point of view, and like you said,
family trust, come even company will become more attractive than
(24:43):
self managed superniation funds. And this is I'm a little
bit sad about it because you know, we all know
that Supernation will set up for Australians to say, for
their retirement, so they are self funded. They don't rely
on the government pension, on the age pension. And we
(25:06):
were promised in ninety I think ninety seven by John
Howard that it was promised by Liberals, but it was
promised that superiation is not going to be taxed. However
government changed, the government changed and the view on superniation changed.
So I feel like a lot of people are getting
(25:28):
ripped off by the tax, especially people again who've been
saving and contributing additional money into Supernation environment because they're
thinking about their retirement, because they're saving money for their
retirement and then by the end of their working life
(25:48):
and now they have the tacks and say they're in
their fifties or sixties and they have the tax which
they have to pay, and I think it's very very
un fair. So unfortunately, the semisp will become less attractive
for quite a number of people, and people will move
(26:09):
their money to our structures. Family trust discretion trust companies
where attacks will be less than this particular tas.
Speaker 1 (26:24):
Okay, sounds like a lot of people accountants in particular,
are going to win out from this change if it
does go through. So we'll see how things fall into
place over the next couple of months. Right, So we've
got a lot of information here to go through. I
think it's answered a lot of people's questions in regards
to self manage super funds, which is absolutely fantastic. So Natalia,
(26:47):
thank you so much for joining me on the podcast
episode and talking us through everything we need to know,
especially for all the crypto holders here that are interested
in this kind of thing. How can we find out more?
Where do we go to reach out to you and
find out how to set up the self manage superfund?
Speaker 2 (27:03):
No, thank you Peter for inviting me, so I almost
always have you to share my knowledge with people. And
if you want to find out more or about self
managed superiation funds, or if you need more guidance on
how to invest your money in a self managed superiation fund,
you can go and book an appointment with myself. You
(27:26):
can go on website www dot SMSF Consulting dot com
dot ail. We have a free fifteen minutes appointment available
and this is where we can start. I can find
out a little bit more about yourself and I can
assist you with fast and quick questions. Always if you
(27:47):
are looking for an accountent or looking for a SMSLF
specialist advisor who can guide you and hold your hand
during your superiation, investment and journey again, you're welcome to
move to easy super and we can assist you awesome.
Speaker 1 (28:05):
Thank you so much. So if you have any questions,
leave them down below as well. The comment section will
afford them all over to Natalia as well, so she
can help answer those particular questions. And if you want
to find out anything else, I'll leave all the links
in the video description down below so you can contact
Natalia and find out a little bit more about how
(28:27):
to sell a super fund. But Metalia, thank you so
much for joining me on this episode. It's been a
pleasure talking to you.
Speaker 2 (28:33):
Thank you very much. Peter, thank you for inviting me.
Speaker 3 (28:36):
You gotta do it like that you've been listening to
the Learned card down or podcast Gotta get It Hi
Crypto is what we like. But this is that investment
or financial advice gotta do your research because it's risky.
We know where it is. This show is education on Lesten.
Crypto is the future really? It ain't, No debrad
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.