ATO set to scrutinise asset valuations
With asset valuations firmly on the ATO’s radar this year, one SMSF auditor has advised SMSF practitioners to take additional precautions to minimise potential regulatory backlash for their clients.
Speaking to SMSF Adviser, BDO national leader or superannuation Shirley Schaefer said valuations will be critical at 30 June this year as they will be measured against the $1.6 million cap.
Consequently, the ATO will be watching valuations very closely and will be able to interrogate the tax return of a fund where the ATO sees a substantial drop in value and no benefits being paid out.
“Those sorts of things will be a bit of a focus for the ATO from 1 July 2017 onwards in terms of what funds are targeted for audit,” said Ms Schaefer.
“If [auditors] see balances dropping substantially from what they were previously carried at then they’re going to want to see something in writing and something that’s fairly strong to justify a significant movement in the value.”
For this reason, Ms Schaefer said it is a good idea for SMSF practitioners and trustees to get an independent valuation in written form.
“Whilst it’s not necessary for it to be an independent valuation for the purposes of the financial statement; it’s certainly good business practice and would minimise any risks,” she said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.