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Auditing, Residential Property

Trustees can help with valuation evidence

property valuation trustees

Trustees and their accountants can play an active role in compiling sufficient property valuation information for an SMSF audit.

A specialist auditor has reminded trustees and their accountants can play an active role in gathering sufficient property valuation information to satisfy ATO compliance requirements.

Elite Super managing director Katrina Fletcher noted the regulator no longer considers a single “kerbside” valuation of a property held by an SMSF as appropriate evidence to satisfy the fund’s compliance obligations, but said trustees can provide the additional information required under the Superannuation Industry (Supervision) Regulations.

“[Trustees thinking] ‘I’ll just ring my real estate agent and ask them for an estimate’ are [often] forgetting to ask for comparable sales [information] to also be noted down,” Fletcher told delegates at the Institute of Public Accountants 2021 National Congress.

“According to the ATO, the agent’s opinion without comparable sales [information] is not enough for audit [purposes].

“So if [a trustee] happens to ask a real estate agent for a value, say, for a commercial factory in the super fund and it doesn’t come with comparable sales [data], they can always go online and [collect] a few screenshots and build up a comparable sales history to go along with that.

“Those two sources of evidence together are quite fine for [the] audit.”

However, she stressed trustees cannot satisfy the valuation requirement by way of an official minute.

“You need external evidence to go with that,” she said.

She stressed trustees cannot rely on SMSF auditors to assist in compiling any additional information needed in the valuation of a fund’s property.

“A colleague of mine who was audited by the ATO recently was told the auditor isn’t allowed to gather sources of comparable sales to put in the audit file. It has to come from the trustee or the accountant,” she warned.

“It is an extra requirement and again we were told [the information had to be] objective and supportive.”

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