Our ATO updates blog provides key tax updates and regulatory changes. Stay informed with the latest insights to ensure compliance and informed decision-making.
Valuing Fund Assets for SMSFs
Each year you need to value your SMSFs assets and provide supporting evidence to your auditor.
One of the many responsibilities SMSF trustees have every income year is valuing your fund’s assets at market value.
The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing your fund’s accounts, statements and SMSF Annual Return (SAR).
Your asset valuations will be reviewed by your approved SMSF auditor as part of the annual audit prior to lodgment of your SAR. Your auditor will check that assets have been valued correctly, assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets.
Make sure you get your valuations done before going to your auditor.
It’s your responsibility to provide objective and supportable evidence to your auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgment of your annual return or a contravention if mistakes have been made.
Start researching now to find what type of evidence your need to support the valuation as this can take time. For some asset types the law requires valuations to be undertaken by a qualified independent valuer. Find out more by visiting SMSF valuation guidelines on the ATO website.
SMSF Trustee Empowerment Day 2024
Highlighting the importance of SMSF trustees protecting themselves and their assets.
At the recent SMSF Trustee Empowerment Day, Melissa Anstis, Director – SMSF Trustee Experience, delivered a speech with a focus on the importance of SMSF trustees protecting themselves from fraud, scams, and schemes.
To stay safe, Melissa encouraged trustees to:
- Always check your dealing with a licensed financial advisor through Moneysmart.
- Be vigilant with your personal details and the details of your SMSF and watch out for alerts that don’t reflect changes you have made.
- If something does not look right, call the ATO on 1800 008 540 or if you suspect fraud or scams, report them to ATO at ato.gov.au/tipoff
Melissa also highlighted that one of the highest risks in the sector is illegal early access to superannuation. Through SMSF illegal early access estimate work, it is estimated that $380.5 million has been illegally withdrawn from the system in 2019–20, with a further $256.1 million in 2020–21. Illegally accessing super can lead to penalties, loss of interest, and disqualification.
Lastly, Melissa stressed that good planning is crucial throughout the life of your SMSF, including when it comes to winding it up. It is important to ensure that you meet all your compliance and tax obligations when closing your SMSF.
If you’re planning to wind up your SMSF, the ATO’s recent publication Winding up a Self-Managed Super Fund and Education products can guide you through the process.
Running an SMSF publication is now available
This publication completes the suite of lifecycle publications which includes Starting an SMSF and Winding up an SMSF.
The ATO’s third publication Running a Self-Managed Super Fund (SMSF) is now available and will help guide existing and potential trustees and tax professionals.
The Running an SMSF publication provides guidance on:
- Contributions and rollovers
- Managing investments
- Paying benefits
- Administering and reporting
This new publication complements ATO’s 2 existing publications Starting a Self-Managed Super Fund and Winding up a Self-Managed Super Fund.
Whether you’re an existing trustee or you’re thinking of starting an SMSF you will find useful information in all of ATO’s publications on the ATO website at www.ato.gov.au/SMSFeducation
Financial Advice – Request for Member Input
To gather valuable insights from Accountants, the FAAA is planning to organise some focus groups to gather valuable feedback and perspectives on:
- Promoting the financial advice profession to consumers
- Promoting the financial advice profession to prospective students
- Promoting the value of the Certified Financial Planner (CFP) designation to accountants who may be looking for high-quality financial advice referral partners for their clients.
Ideally, the FAAA is looking for accountants who are holders of a designation, who are not part of an integrated planning and wealth firm, and are based in or close to the Sydney Central Business District (as they would ideally like these sessions to be face-to-face).
If you are interested in participating in these focus groups, kindly send an email to ipaadvocacy@publicaccountants.org.au, authorizing the IPA to share your contact details with the FAAA.
2024-25 Corporate Plan and Reorganisation Announcement: APRA
Australian Prudential Regulation Authority (APRA) has released its 2024-25 Corporate Plan. This year’s Plan, for the first time, includes APRA’s annual policy and supervision priorities, as well as a new inclusion of data priorities. By combining the formerly separate publications, APRA seeks to enhance transparency and assist regulated entities to plan ahead.
Some Highlights to APRA’s priorities in the Plan:
- Increasing minimum standards for operational resilience through the implementation of new Prudential Standard CPS 230 Operational Risk;
- Raising industry standards on cyber risk management;
- Developing APRA’s first system stress test to model and assess interconnections across the financial system;
- Lifting expectations of entities to consider the financial impacts of climate risk in decision-making; and
- Working with the Australian Securities and Investments Commission to ensure superannuation trustees meet their requirements under the retirement income covenant.
In a separate release, APRA has also announced some changes to its internal structure that will support its strategic priorities set out in the 2024-25 Corporate Plan.
From 2 September, APRA will have its 5 industry supervision groups being managed in 2 supervision divisions instead of the current 3 frontline supervision divisions. The two frontline supervision divisions will be:
- A General Insurance and Banking division;
- A Life Insurance, Private Health Insurance and Superannuation division.
APRA will also bring together its existing financial and non-financial risk teams in a Cross-industry Risk division, alongside teams focused on systemic risk work. Seeking to create a centre of excellence for risk specialists, improving knowledge transfer and cross-skilling opportunities, APRA looks to take a cross-industry and system-wide view of risks.
APRA’s 3 other divisions – Policy & Advice; Technology & Data, and Chief of Staff & Enterprise Services – remain broadly unchanged.
Legislative Amendments and Proposals, Government Announcements and Consultations
27 August 2024 – Small and medium-sized banks review – The Treasurer has asked the Council of Financial Regulators and the Australian Competition and Consumer Commission to review the small and medium-sized banking sector. They will conduct consultations with interested parties and report to the government by 1 July 2025.
In conclusion, our ATO updates blog is an essential tool for keeping you informed about important tax updates and regulatory changes. By staying updated with the latest insights, you can ensure compliance and make informed decisions that positively impact your financial future.
Source: Australian Taxation Office & Institute of Public Accountants
