ATO Targeting SMSF Valuations

26 Mar 2024

Written by

David Busoli, Principal

The ATO have used data analysis to target 16,500 SMSFs that have reported the same value for certain classes of assets, primarily direct property and unlisted companies and trusts, for the last three, or more, years.

Though there may be good reasons why an asset value hasn’t changed, the ATO’s obvious concern is that these SMSFs may not be meeting their legal requirement to value and report their assets at ‘market value’ every year.

Relevantly, some trustees and auditors may not feel that the annual valuation requirement is of any real concern unless it affects pension commencements, total super balance limits, related party transactions and other matters affected by valuations however the standards require that the valuation requirements must be met, or administrative penalties can apply.

More than 1,000 SMSF auditors have been associated with this “high-risk” population. These auditors raised no auditor contravention reports so it can be expected that this investigation may ultimately focus on them as well.

The ATO is currently sending targeted messages to trustees and auditors, alerting them to their responsibilities. It can be expected that, unless changes are noted in each SMSF’s next annual return, a less sanguine approach will result.

On another matter, please take this opportunity to view our Do You Qualify for an SMSF? animated video on You Tube. You may find it useful to share with prospective SMSF trustees.

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