Ensuring that SMSF assets are valued correctly is an important part of being a trustee. But what exactly are the rules around asset valuations and how often do they need to be done?
Some assets are easy to have valued. Cash for example is simply the balance. Shares listed on the ASX are revalued daily. But for some other assets it just isn’t that simple.
The most common questions we get asked around asset valuations are the following:
- Who can value my real estate property?
- When do the assets need to be formally valued?
- How do I get a market valuation for my artwork and collectibles?
Let’s tackle these one by one:
Who can value my real estate property?
You may not be aware of this but trustees can value their own real estate assets themselves. As long as the value is based on objective and supportable information. For example you may notice some properties that are similar to yours recently sold so you can use this as the basis for your own property value. Real estate agents can also provide formal valuations or appraisals and often these are done at no cost.
When do the assets need to be formally valued?
All assets of a SMSF must be valued every year or have their values reviewed and considered. In addition to this is it highly recommended to have assets formally valued by a professional when the following events occur:
- Pension commencements
- Lump sum payments
- Member rollouts
- Death benefit payments
How do I get a market valuation for my artwork and collectibles?
Artwork and collectibles can be a bit tricky. But as you will be aware, artwork and collectibles must be insured within 7 days of purchase. This can be helpful when needing a valuation as the insurance company will apply a value to those assets. You may also consider obtaining one from a professional valuer such as an Art Consultant. If you sell these assets to a related party you must obtain a valuation by a qualified independent valuer.
So as you can see, meeting your trustee obligations regarding asset values isn’t as daunting a task as you may have thought. Just make sure you document your decisions and speak to your trusted advisor if you are not sure. You can also check out the ATO Valuation Guidelines here.
If you would like to discuss your SMSF Asset Valuations contact Your Super Specialist here.
|This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.|