In all cases, the person who conducts the valuation must base their valuation on objective and supportable data.
Depending on the situation, a valuation may be undertaken by a:
- registered valuer
- professional valuation service provider
- member of a recognised professional valuation body
- person without formal valuation qualifications but who has specific experience or knowledge in a particular area.
In certain instances, the law requires valuations be undertaken by a qualified, independent valuer.
Qualified independent valuer
A valuer will be qualified either through holding formal valuation qualifications or by being considered to have specific knowledge, experience and judgment by their particular professional community. This may be demonstrated by being a current member of a relevant professional body or trade association.
The valuer must also be independent. This means that the valuer should not be a member of the fund or a related party of the fund (for example, they should not be a relative). They should be impartial and unbiased and not be influenced or appear to be influenced by others.
When you need a qualified independent valuer
The super laws only require a valuation by a qualified independent valuer in the following circumstances:
- from 1 July 2011 for any collectables and personal use assets that were acquired on or after 1 July 2011 and disposed of to a related party
- from 1 July 2016 for any collectables or personal use assets that were acquired by the SMSF before 1 July 2011 and disposed of to a related party after 30 June 2016.
However, you should also consider using a qualified independent valuer if:
- 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 or difficult.
You should no longer rely on an independent valuation if it:
- has become materially inaccurate, or
- the asset's value has changed significantly since it was last valued.
In this circumstance we recommend you obtain a new valuation or use other forms of evidence to support your determination of the asset's market value.
An approved SMSF auditor can also seek an independent valuation of the fund's investments, as part of their audit and assurance engagement.