Valuation

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

 

What sort of Collectables and personal use assets?

 

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.

 

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.

 

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).

 

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

 

Sorry - no idea about valuing artwork!