Short answer
Value the trust's assets and liabilities at market value, then work out what the fund's units are worth under the trust deed. The ATO says to consider the trust's assets and the consideration paid. Evidence includes an independent asset valuation, a property valuation where property is the only asset, or the latest arm's length sale of a unit.
What does the ATO say about valuing units in an unlisted unit trust?
The ATO's guide to valuing SMSF assets says to consider the value of the trust's assets and the consideration paid for the units. It lists the evidence that can support the value:
- An independent valuation of the trust's assets.
- A property valuation, where property is the trust's only asset.
- The most recent arm's length sale of a unit in the trust.
If none of those exists, the trustees can substantiate the value by setting out their method and assumptions. The ATO says to consider a qualified independent valuer if the valuation is complex or the holding is significant. It also says signed audited statements that show the trust's assets at cost are unlikely to be sufficient on their own.
How do we value units in a unit trust?
We work from the trust's net assets to the fund's units. A suitably qualified business valuer at Valuation Group follows four steps:
- List the trust's assets and liabilities at the valuation date, usually 30 June.
- Restate each asset to market value, using third party evidence where it exists. For property, that is a valuation by a registered or certified property valuer.
- Deduct the liabilities to reach the trust's net assets.
- Read the trust deed to see what each unit is entitled to, then work out the value of the fund's units.
If the trust runs a business, the business is valued first. Whether any discount applies to a holding of units depends on the trust deed and the facts, and the report sets out the reasoning.
Read the full guide
- Unit trust valuation for SMSFsUnits in a private unit trust need a market value at 30 June like any other fund asset. This guide explains where the value of a unit comes from...
- Valuing a trust or company that owns propertyWhen a trust or company owns property, the fund holds units or shares, not the property. We value those units or shares, using a property valuation...
- 30 June SMSF valuationEvery 30 June the trustee reports each fund asset at market value, and the auditor checks the evidence. This page explains what that means for...
- In-house asset test valuationsAn SMSF's in-house assets must not exceed 5% of the fund's total assets at market value, tested at year end. A sound valuation of the related company...
- How we value SMSF holdingsThe methods we use, what we analyse and what the report contains.
- Fixed fees, confirmed before we startFixed fees set by what the fund holds. No hourly billing.
Related questions
Can a unit trust be valued at the price paid for the units?
The ATO says to consider the consideration paid, but it is one factor. The trust's assets, any recent arm's length sale of a unit and the trust's liabilities also matter, and the value must be market value at the valuation date.
More short answers
- Are audited accounts enough to value an SMSF unit trust?Usually not. The ATO says signed audited statements showing a unit trust's assets at cost are unlikely to be sufficient on their own. Trustees should...
- How is a property unit trust valued for an SMSF?A property unit trust is valued by taking the property's market value from a registered or certified property valuer, adding the trust's other...
- How are unlisted shares in an SMSF valued?Unlisted shares are valued by considering the company's assets and the consideration paid, because there is no quoted price, the ATO says. Evidence...
- What is market value for an SMSF?Market value for an SMSF is the amount a willing buyer could reasonably be expected to pay a willing seller, assuming they deal at arm's length...
Last updated . General information only, not advice about your circumstances. A valuation depends on the facts of the business and the purpose it is for.