Earlier last year, the ATO wrote to the trustees of 16,500 SMSFs and over 1,000 associated auditors. To put them on notice.

The rest of the industry glanced up, “not me”, and carried on; business as usual.

Yet, they missed the key part.

Both groups were on alert because there had been no change in asset valuations for three years.

They were in technical breach of Regulation 8.02B, which requires funds to value and report their assets at market value each year. With supporting evidence.

The industry norm of valuing assets every three years is a myth and has no basis in legal reality.

So, start preparing your clients now.

They will need to get used to this greater level of vigilance because the ATO is also putting pressure on SMSF auditors. 

They continue to deregister auditors with vim, one of the key reasons being a “failure to gather audit evidence of market valuations”.

For your clients, they will need to provide “objective and supportable data” as evidence of their valuations. As if explaining it to an independent third party.

They won’t like it, and they have time to get their house in order, but this change is coming to everyone.

If you have any questions, please do get in touch.