Asset valuation crackdown imminent for SMSFs
Two SMSF auditors, including a big four firm, have revealed that they expect the ATO to home in on asset valuations imminently, ahead of the introduction of new caps on 1 July 2017.
Deloitte partner Jo Heighway believes the tax office will start looking more at asset valuations this year.
“Asset valuations really do make a difference to how relevant the information is that trustees are getting on their fund performance,” Ms Heighway told SMSF Adviser.
“If assets are not revalued for a long period of time, they can be getting inaccurate information.”
Ms Heighway said accuracy is important as we approach 1 July when the $1.6 million transfer balance cap and the $1.6 million balance restriction for non-concessional contributions are introduced.
“That’s going to become much more important from the tax office perspective once we start looking at the new rules and the caps on pensions and those types of things,” she said.
“Valuations being current will obviously impact on those assessments. There will be a risk to undervalue and auditors will need to be really careful.”
ASF Audits partner Richard Smith echoed Ms Heighway’s sentiments.
“The ATO wants to have further discussions with industries around valuations because now you’ve got these caps of $1.6 million and obviously that’s all based on the valuation of the assets in the fund,” Mr Smith said.
“We’ve had to have all assets reported at market value for a number of years now, but obviously you’re getting to the point now where it’s got a direct impact on these caps so for the next year, and certainly for the reporting for 30 June 2017, it’s going to be incredibly important.”
Mr Smith said auditors will have to be especially vigilant when checking the accuracy of valuations this year.
“It’s going to be a very contentious issue for a number of funds to solve where your trustees or accountants say this is the valuation and asking if there is sufficient evidence to prove that that is a correct valuation,” he said.
“Again, if they want to start pensions or add contributions in from 1 July this year, then obviously they need to have a valuation of the fund, so it is pertinent for them and that’s going to be the biggest headache for us.”
LARA BULLOCK
Friday, 13th January 2017
smsfadviser.com
Hot Issues
- ATO encourages trustees to use voluntary disclosure service
- Beware of terminal illness payout time frame
- Capital losses can help reduce NALI
- Investment and economic outlook, August 2024
- What the Reserve Bank’s rates stance means for property borrowers
- How investing regularly can propel your returns
- Super sector in ASIC’s sights
- Most Popular Operating Systems 1999 - 2022
- Our investment and economic outlook, July 2024
- Striking a balance in the new financial year
- The five reasons why the $A is likely to rise further - if recession is avoided
- What super fund members should know when comparing returns
- Insurance inside super has tax advantages
- It’s never too early to start talking about aged care with clients
- Capacity doubts now more common
- Most Gold Medals in Summer Olympic Games (1896-2024)
- SMSF assets reach record levels amid share market rally
- Many Australians have a fear of running out
- How to get into the retirement comfort zone
- NALE bill passed by parliament
- Compliance focus impacts wind-ups
- LRBA interest rates increase for 2025
- Income-free areas set to increase from 1 July
- Most Spoken Languages in the World
- Middle-to-higher incomes boosting SMSF growth
- Investment and economic outlook, May 2024
- Transitioning into retirement: What you should know
- Plan now to take advantage of stage 3 tax cuts
- Deeming freeze a win for Age Pensioners
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
January - March 2017 archive
- Calls for calm over pending CGT amendments
- Almost the world's best for retirees
- ATO reports on top contravention areas for SMSFs
- What recent retirees can teach pre-retirees
- Deloitte points to ‘red flag’ SMSF patterns
- Save early, save often
- Government pushes forward with multinational tax measures
- Jump-start your retirement savings
- Government urged to rectify ‘legislative shortcoming’ with CGT relief
- Some financial terms explained
- Areas of key focus for SMSFs in 2017.
- Powerful Superannuation modelling tools available on our site.
- Your New Year reading: beyond John Grisham
- What a long-term view of the market can teach investors
- CGT confusion seeing unnecessary sell-offs
- ‘Devastating’ property investments hitting SMSFs
- Asset valuation crackdown imminent for SMSFs
- New Year (investment) resolutions
- Trump stimulus to boost global markets
- Female advice customers on the rise
- Retirement costs outpace rise in CPI
- ATO set to scrutinise CGT relief claims