The Australian Taxation Office (ATO) has quietly but significantly changed its approach to how cryptocurrencies should be valued within Self-Managed Super Funds (SMSFs). This shift, recently highlighted by one of the Magazine, marks a move away from prescriptive guidance toward a more principles-based framework—placing greater responsibility on trustees to justify their valuations.
What’s Changed?
Previously, the ATO’s website suggested that trustees could simply use the June 30th closing price from a crypto exchange (in AUD) to value their digital assets. That specific guidance has now been removed.
In its place, the ATO now requires trustees to maintain “proper market valuation records” to support the figures they report to auditors. In other words, it’s no longer about using a specific source or method—it’s about being able to prove your valuation is fair and reasonable.
More Flexibility, More Responsibility
According to one of the Audits firm, trustees now have the freedom to use pricing data from a variety of sources—such as CoinMarketCap, CoinGecko, or Yahoo Finance. However, this flexibility comes with a catch: you must be able to justify your choice and provide supporting documentation.
If the price source is in USD, it must be accurately converted to AUD using a reliable exchange rate.
The Decentralization Dilemma
One of the challenges in valuing crypto assets is the lack of a centralized exchange like the ASX. Prices can vary between platforms typically by 1–2%, but during periods of high volatility, discrepancies can spike to 4–5%.
While minor differences may not raise red flags, larger gaps could prompt auditors to question the valuation. This makes transparency and consistency in your valuation method more important than ever.
What Trustees Should Do Now
Here’s how SMSF trustees can stay compliant under the new approach:
- ✅ Choose a reputable pricing source and stick with it consistently.
- ✅ Document your valuation method and keep records of the prices used.
- ✅ Convert foreign currency values accurately using reliable exchange rates.
- ✅ Be prepared to explain your valuation to your auditor, especially during volatile market periods.
Final Thoughts
The ATO’s updated stance reflects the evolving nature of digital assets and the need for more robust governance in SMSFs. While the new approach offers greater flexibility, it also demands greater diligence. Trustees must now take a more active role in ensuring their crypto valuations are defensible, transparent, and well-documented.
For More Information visit our Website
Reach out to us at biz@carisma-solutions.com.au
Connect with us on our WhatsApp.
Credits
Sundaram Shanmugam, Smart SMSF Team
