The ATO has advised that it will not apply a penalty for self managed super fund (SMSF) trustees that have difficulty in obtaining evidence to support market valuations of assets due to COVID-19.
SMSF trustees are required to provide objective and supportable evidence to their auditor each year to establish that assets of the fund are valued at market value in compliance with the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations). To satisfy this requirement, the valuation evidence should be provided in accordance with the ATO's Valuation guidelines for self-managed super funds.
During the 2020 and 2021 financial years, the ATO will not apply a penalty if it is satisfied that the difficulty in obtaining valuation evidence is due to COVID-19. Instead, the ATO will send the SMSF trustee a letter advising them to ensure they comply with the ATO's valuation guidelines and have supporting valuation evidence by the time of their next audit if possible. The ATO warns that repeated contraventions of the valuation evidence requirements could lead to penalties.
If a trustee has difficulty obtaining valuation evidence due to COVID-19, the SMSF auditor should still consider modifying Part B of the audit report and lodge an auditor/actuary contravention report (ACR) if necessary. The auditor should also provide reasons on the ACR as to why the trustee was unable to obtain the appropriate evidence.
Source: www.ato.gov.au/Super/Sup/Regulation-8-02B-and-evidence-required-to-support-real-property-valuations/; www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/Valuation-guidelines-for-self-managed-super-funds/