3:10AMSunday Apr 20th, 2014

Trustees should Know their SMSF Value

Money76Good practice is set to become an official legislation.

From July 1 this year, all trustees of self managed super fund (SMSF)’s must obtain a market valuation of investments and assets to submit with the annual tax return.

The Australian Tax Office (ATO) is cracking down on under valuations, and they warned trustees of SMSFs that audits are to be conducted if suspicious figures are lodged.

Trustees will now have to prove how the valuation was obtained.

For some items, such as shares or savings, getting a valuation is easy: all that is required is a yearly statement or checking the ASX shares-list.

For other investments, a proper valuation is essential, and the ATO has set some specific guidelines to ensure that assessments are valid, according to WA Today.

Three valuation strategies accepted by the ATO are the depreciated replacement cost method, the income-based method and the comparison approach.

While the first two are best conducted by a professional, the comparison approach compares the market value of similar property’s and is easily undertaken by trustees.

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