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ATO investigating 16.5k SMSFs over valuation compliance

More than 16,500 SMSFs are being scrutinised by the ATO as they allegedly reported certain classes of assets at the same value for at least three income years.

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These assets include residential and commercial property, unlisted companies and unlisted trust investments.

Additionally, the regulator said there were more than 1,000 SMSF auditors associated with this high-risk population and its data reveals no auditor contravention reports (ACRs) were lodged for potential breaches of the market valuation rules for the assets.

The ATO is increasingly using data to identify and deal with risks and has recently identified a number of funds that have maintained the same values on reported SMSF assets in their annual return.

It stated there are concerns these funds may not be meeting their legal requirement to value and report their assets at “market value” every year.

The regulator has now started to send targeted messages to trustees and auditors about this obligation and will be monitoring the approach taken by the funds in their next annual return.

The ATO has reminded SMSF trustees that they must value their assets each year and provide supporting evidence to their auditor.

The regulator said a key responsibility of trustees every income year is valuing their fund's assets at “market value” and before lodging the fund’s annual return, the retained auditor is required to check the assets have been valued correctly and assess and document whether the basis for the valuation is appropriate.

The ATO said trustees should be aware that if their asset valuations fail to meet the valuation requirements, the fund and members may have additional tax to pay and they could be liable for administrative penalties.

Additionally, as part of the annual audit process, trustees must provide objective and supportable evidence to their SMSF auditor to support the valuation of their fund assets. This includes providing all relevant documents specifically requested by the auditor.

 

 

 

Keeli Cambourne
26 March 2024
smsfadviser.com


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David Forrest

Director
BEc (Acc), MBA, CPA, FFin

David has been in the Financial Services Industry for nearly 30 years. He was one of the founding Directors of the successful Financial Planning and Stockbroking Practice, Henderson Gregory Forrest, for a decade. Prior to that, he held senior roles in companies such as ING, KPMG Accountants and AMP. David was previously Chairman of OAMPS Superannuation Trustee Board and currently serves as an independent Board Director for several companies.

David’s extensive experience in all forms of superannuation, including Self Managed Super Funds (SMSF), Defined Benefit Funds, retirement funding through Account Based Pensions, stockbroking with a focus on Direct Share Investment, Taxation/Remuneration Planning, Centrelink, Aged Care and business management, equip him to advise expertly on all aspects of Financial Advice.

Those with a particular interest in superannuation/SMSFs, direct share investment, salary packaging or applying for the Centrelink Pension will find his knowledge and ability in formulating and implementing creative, logical and simple wealth creation strategies a valuable asset.

David maintains a strong personalised client service focus, providing tailored solutions for clients.

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David Forrest is an Authorised Representative of Integrity Financial (SA) Pty Ltd ABN 16 133 921 187 — AFSL No 334846

Michelle Forrest

Michelle Forrest

Business Finance Manager
B Bus (Acc), CPA

Michelle’s career has spanned across the Financial Services, Retirement Living and Aged Care industries working in the private sector, not for profit and more recently with the state government for over 20 years. Her experience extends to many facets of the financial services industry, having worked in superannuation administration, technical support and financial planning practice administration.

Commencing with AMP and subsequently working in commerce and accounting roles with companies such as Brambles, Adelaide Bank Retirement Services, ECH Inc and SA Health and Wellbeing, Michelle returns to financial services after working in practice financial management at Henderson Gregory Forrest. This wide range of experience from senior accounting and management roles has provided Michelle with a strong background in business administration.

With an astute financial acumen and keen interest in business improvement strategies, Michelle ensures the smooth running of the Integrity Financial Advisory practice providing valued management support to our personalised client service focus.

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Jasmine Smith

Jasmine Smith

Client Service Manager

Jasmine has worked in the financial services industry for over 12 years in all areas of client administration, working with David since 2013.

Jasmine has extensive knowledge and experience in client service including implementation of advice, portfolio reporting, assisting with the establishment of Self Managed Super Funds (SMSFs), term deposit management and a long history of helping clients with their enquiries.

Jasmine’s attention to detail, yet gentle approach, means she is able to solve the trickiest of questions for our client community.

Jasmine has gained her Certificate III in Financial Services qualification.

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Merrilyn Smith

Senior Client Service Manager

Merrilyn has worked in the financial services industry for over 11 years in all areas of client administration, and is a new addition to our client services team, returning from Melbourne to join the team in June 2019.

Merrilyn has extensive knowledge and experience in client service including implementation of advice, managed fund administration, assisting with the establishment of Self Managed Super Funds (SMSFs) and process improvement for the previous practices she has worked with. Merrilyn’s experience with direct shares constitutes the other part of our administrative support for direct equity investments.

Merrilyn’s warm and caring nature continues to endear her to our clients and she has already established herself as a valued member of our team.

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