All-Crypto retirement accounts will be fined: Australian Tax Office


The Australian Tax Office (ATO) sent warning letters to investors who placed most of their savings in cryptocurrency.

As part of an ATO effort to warn against high-risk retirement investment strategies, 18,000 self-managed fund owners (SMSFs), a type of privately owned retirement account, was said they would have to incur penalties of up to AUD 4,200 for violation of the rules, according to local media reports.

While the letter was aimed at any SMSF holder with more than 90 percent of his retired savings in a single asset – mainly owned – the ATO also identified cryptocurrencies as a high-risk investment.

"We have already seen two cases of SMSFs that have lost huge sums of their retired savings through cryptocurrency investments," an ATO spokesman told Australian news site Micky.

To be clear, it is not the class of activity itself against which the agency warns, but being strongly overexposed in a single resource.

The Australian Securities and Investments Commission (ASIC) takes a similar line:

"Be wary of services that offer to create an SMSF for you in order to gain exposure to cryptocurrencies. The management of an SMSF does not only involve significant times, skills and responsibilities, but can also put the retirement savings at risk. "

Neither the ATO nor the ASIC responded to requests for comment by press time.

In particular, the US IRS (Internal Revenue Service) sent a series of letters to encrypted investors this week.

Image of the Australian Tax Office via Shutterstock

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