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.
For a SMSF which owns property what are the ATO’s (or indeed the new legislation’s) requirements regarding the valuation as at 30th June 2017. Will a real estate agent’s “market assessment”, which is currently acceptable, still prevail, or will the SMSF be required to get a formal valuation ? (current costs around $800-$1,000 !)….and if the latter, how often ?
CoreLogic RP Data analytic assessment costs less than $20 and will satisfy the ATO in most cases
If you Google ‘SMSF Valuation Guidelines’, one of the first entries to come up in the search results will be the ATO’s current guidance on the topic. However, you need to find a window when the ATO’s website is available!