New Valuation Guidelines from the ATO

The ATO has issued a new “Valuation Guide” for SMSFs.  The new guide replaces Superannuation Circular 2003/1.

While the ATO is not bound to accept a value obtained in accordance with the new guidelines, the ATO will generally accept a value determined in accordance with the valuation guidelines, where there is no evidence that different values have been used for SIS and taxation purposes and the valuation was based upon “objective and supportable” data.

Guidelines provide a summary of the key valuation requirements for various transactions including “transfers between SMSFs and related parties” and “commencing a pension”.

In regard to transfers between SMSFs and related parties – the guidelines provide that acquisitions must be at market value while disposals must be made on an arm’s length basis.

In regard to commencing a pension - the guidelines provide that valuation of assets must be on an “objective and supportable” basis.  An annual valuation (particularly of real estate) is not generally required unless there has been a material event which significantly affects the asset.