Join Australia's most dynamic and respected property investment community

Valuation

Discussion in 'Accounting & Tax' started by Redwing, 3rd Jun, 2016.

Tags:
  1. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    838
    Location:
    WA
    Just wondering what would be a cheap and acceptable 'objective and supportive data' for something like Collectables and personal use assets (other than a certified valuation)

    Valuation of your SMSF’s assets

    It is a requirement under the superannuation law that the assets in your SMSF be valued each financial year. This is so your accountant can record the market value of the assets in the SMSF’s 2015/2016 financial statements for income tax purposes and your SMSF auditor can verify that you have not contravened various provisions of the income tax and superannuation laws. The superannuation law does not require that you use a qualified independent valuer, as long as the valuation that you have arrived at is based on objective and supportive data
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,979
    Location:
    Sydney
    What sort of Collectables and personal use assets?
     
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,374
    Location:
    Sydney
    The ATO has issued a recent view on this issue and the changed SIS laws re these assets.

    Collectables - don't leave it too late | Australian Taxation Office

    This does not address valuation. This guide is extensive and covers more than you ask Market valuation for tax purposes | Australian Taxation Office

    IMO a arms length "expert" valuation every two years should suffice. A auction house, antique valuer etc may be appropriate. Their qualifications should appear on the letter of valuation. Many auction houses provide valuation services - for a fee. Often needed for the insurance policy that is now also required !! Your fund auditor may be a good source of guidance to avoid unnecessary cost and effort.

    I would consider other forms of valuation eg recent sales data etc unreliable as these assets need personal valuation due to variation and uniqueness.

    The auditor may also seek confirmation on storage, insurance and location.
     
    Last edited: 3rd Jun, 2016
  4. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

    Joined:
    24th Jun, 2015
    Posts:
    227
    Location:
    Philippines
    as Paul@PFI says insurance is critical. Any collectable or personal use assets purchased prior to 1 July 2011 must be insured in the name of the SMSF by 1 July 2016. Reg 13.18AA(5) says that the trustee of an SSMF commits an offense if it is more than 7 days since the fund purchased the collectable or personal use asset and it isn't insured in the name of the SMSF.
     
  5. Property Hoarder

    Property Hoarder Active Member

    Joined:
    24th Jun, 2015
    Posts:
    40
    Location:
    Melbourne
    Ask your auditor. We all have a different opinion.

    For me it is going to be different for different assets but in short if trustee does the valuation I would want to see the working (the list of other assets that sold which compare to your asset. It would be good if I could look up these items on line)

    You could also use someone that I would expect to know the value to give you a letter (like an antique dealer).
     
  6. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    838
    Location:
    WA
    Hi Terry,

    Artwork, actually 2 x collagraph's that have previously been on a rental agreement for a few years with a business

    Now being off-hired and returned, likely I will need to dispose of or store elsewhere under the rules
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,979
    Location:
    Sydney
    Sorry - no idea about valuing artwork!