Valuation guidelines for self-managed superannuation funds
This guide is designed to help you as a self -managed superannuation fund (SMSF) trustee when valuing assets for super purposes. It is not a comprehensive handbook about valuations.
This guide does not take away your responsibility to manage investments prudently. You must ensure the fund’s investment strategy is reviewed regularly and takes into account the retirement goals of its members.
Summary
Table 1: Summary of valuation requirements
| Event | Requirement |
| Preparing the SMSF financial accounts and statements | Assets should be reported at market value.The valuation should be based on objective and supportable data. |
| Collectables and personal use assets – acquired after 1 July 2011Transfer or sale to a related party | Must be made at a market price determined by a qualified independent valuer. |
| Collectables and personal use assets – acquired before 1 July 2011Transfer or sale to a related party | For the period 1 July 2011 to 30 June 2016 transfers to related parties do not require valuation by a qualified independent valuer. However, these transfers should be made at an arm’s length price that is based on objective and supportable data.From 1 July 2016 transfers to related party must be made at a market price determined by a qualified independent valuer. |
| Transfers between SMSFs and related parties | Acquisitions of permitted assets must be made at market value.Disposals of assets must be made on an arm’s length basis. |
| Transfers between SMSFs and unrelated parties | A valuation is not required however the transfer must occur atarm’s length. |
| Determining the value of assets that support a super pension | The account balance needs to be determined on the commencement day of the pension or, for ongoing pensions, on 1 July of the financial year in which the pension is paid.An annual valuation is generally not required unless there has been event that significantly affects the value of the asset.The valuation should be based on objective and supportable data. |
| Testing whether the market value of the SMSF’s in-house assets exceed 5% of the value of total assets held by the fund | The value of a fund’s total assets needs to be determined on 30 June of the financial year the in-house assets are held.An annual valuation is generally not required unless there has been event that significantly affects the value of the asset.The valuation should be based on objective and supportable data. |
Checklist for obtaining valuations
Some assets must be valued in a particular way – these are summarised in table 2. For more detail, see Specific requirements for asset classes.
Table 2: Events and valuations requirements
| Event | Valuation requirement |
| Preparation of SMSF financial accounts and statements. | Based on objective and supportable data |
| Collectables and personal use assets – acquired after 1 July 2011 and transferred or sold to a related party after that date | Qualified independent valuer |
| Collectables and personal use assets – acquired before 1 July 2011 and transferred or sold to a related party before 1 July 2016 | Transfer made at arm’s length pricethat is based on objective and supportable data |
| Collectables and personal use assets – acquired before 1 July 2011 and transferred or sold to a related party from 1 July 2016 | Qualified independent valuer |
| Acquisition of an asset from a related party of the fund | Acquired at market value that is based on objective and supportable data |
| Disposal of an asset to a related party of the fund | Sale price should reflect a true market rate of return |
| Testing whether the market value of the SMSF’s in-house assetsexceeds 5% of the value of its total assets. | Based on objective and supportable data |
| Determining the value of assets that support a super pension or income stream. | Based on objective and supportable data |
We recommend the use of a qualified independent valuer where the value of the asset represents a significant proportion of the fund’s value or the nature of the asset indicates that the valuation is likely to be complex.
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