Listed below are Investments Disallowed under the ESUPERFUND Platform:
Private Companies and Trusts
Clients of ESUPERFUND are not allowed to invest in Private Companies or Private Trusts that are not listed on the ASX. The rationale for disallowing these Investments is that the underlying Company or Trust that the SMSF invests in must be "effectively audited" by ESUPERFUND to ensure that the SMSF has not indirectly breached Super Laws via these related entities. This is outside the scope of our low cost model offering.
Loans to any Person or Entity
Clients of ESUPERFUND are not allowed to lend money from their SMSF to any person or entity irrespective of whether the loan is on commercial terms. In most cases it is actually illegal to lend money from a SMSF to a Fund Member (or an associate of a Fund Member by blood or marriage) or to an entity associated with a Fund Member. Determining if the loan is within or outside the Super laws, whether the Loan is to a Fund Member or associate of a Fund member (which is complex to determine), whether loan agreements exist and if they do reviewing these loan agreements and determining if the terms are being adhered to and do not contravene Super laws is a difficult and time consuming process. This added level of complexity is outside the scope of our low cost model offering.
Crypto-Currencies (e.g. Bitcoins)
Clients of ESUPERFUND are not allowed to invest in crypto-currencies (e.g. bitcoins). The rationale for disallowing digital currencies investment is that the investment account in most instances cannot be established under the name of the SMSF. This means that the crypto-currencies are invariably held by clients in their personal names with SMSF monies. This is tantamount to a super withdrawal and using the monies to acquire the asset in the Trustees personal name. The ATO would not accept that the owner of the asset is the SMSF in this case and where the monies accessed were preserved, the Fund would be severely penalized for illegal access of super benefits. Other reasons for disallowing crypto-currencies investment are that we are unable to receive trading data and transaction data to attend to the SMSF Annual Compliance work as well as the additional complexity in converting income and expenses from digital currency to Australian currency. This added level of complexity is outside the scope of our low cost model offering.
What happens if your SMSF invests in a Disallowed Investment?
ESUPERFUND will not be able to act for clients who invest in any asset that is not listed as an Allowable Investment, unless approved by ESUPERFUND. Unfortunately if you are a client of ESUPERFUND and subsequently invest in any asset that is not listed as an Allowable Investment (unless approved by ESUPERFUND) then ESUPERFUND reserves the right to immediately cease acting for your Fund in which case you will need to find a new accountant to act for your Fund.