Short answer
The ATO can apply the most appropriate valuation method instead of accepting the trustee's figure. The ATO has said outdated valuation practices can mean penalties for trustees and compliance action for auditors. An auditor without sufficient evidence of market value should consider a modified audit report and an auditor contravention report (ACR) where the reporting criteria are met.
What does the ATO do if a value is not supported?
It applies the most appropriate method. The ATO's guide to valuing SMSF assets says it generally accepts a valuation that does not conflict with the guide, matches the value used for any related capital gains tax event, and is based on objective and supportable data. Otherwise it applies the most appropriate method.
Trustees must value all fund assets at market value for the accounts and statements each year, under regulation 8.02B of the SIS Regulations. A figure that is not market value, or that cannot be supported, does not meet that rule.
What can it mean for trustees?
Penalties are possible. SMSF Adviser reported in March 2025 that the ATO said outdated practices can mean penalties for trustees. The practices it named were valuing only every three years and not obtaining objective data on the underlying assets of an unlisted unit trust. No penalty amount is given here, because what applies depends on the facts of each fund. The fund's adviser or the ATO can say.
A wrong value can also carry through. Market value is used for the fund's accounts, the in-house asset test, the start of a retirement income stream, minimum pension payments and each member's total super balance, so a value that cannot be supported can affect more than one figure.
What can it mean for auditors?
The ATO's guidance on Division 296 and SMSF audits says auditors must check that sufficient and appropriate evidence supports the market value reported for each fund asset, under regulation 8.02B. If the evidence is insufficient, the auditor should consider a modified audit report and an auditor contravention report (ACR) where the reporting criteria are met.
SMSF Adviser also reported that the ATO named compliance action for auditors as a possible outcome, and that in all auditor reviews finalised so far the auditor had not obtained sufficient evidence.
How can trustees replace an unsupported value?
Replace it with a value that rests on evidence. For unlisted assets that can be an independent valuation of the entity's assets, a recent arm's length sale, or a documented method and assumptions, with a qualified independent valuer where the holding is complex or significant. For context, the ATO's own initial evaluation, in its key messages of 8 July 2025, found that after its market valuation letter campaign around 63% of funds changed property valuations and 45% changed unlisted trust investment valuations. (SMSF Adviser reported 80% and 48% in March 2025.)
We value assets. Trustees and their advisers decide how to deal with an earlier value, and we do not give legal, tax or financial advice. Our guide to the ATO letter on unchanged values explains the background.
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...
- Private company shares in an SMSFShares in an unlisted company need a market value at 30 June like any other fund asset. Here is how they are valued, what the auditor looks for, and...
- Got an ATO letter about unchanged SMSF values?In 2024 the ATO contacted SMSF trustees and auditors about funds that had reported assets such as unlisted trusts at the same value for three years...
- 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...
- 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
Does an auditor have to report an unsupported value?
The ATO says an auditor without sufficient evidence of market value should consider a modified audit report and an auditor contravention report (ACR) where the reporting criteria are met. Whether either is needed for a particular fund is for the auditor to judge.
More short answers
- What valuation evidence does an SMSF auditor need?An SMSF auditor needs sufficient and appropriate audit evidence that the market value reported for each fund asset is supportable. The ATO says...
- How often do SMSF assets need to be valued?Every year. SMSF trustees must value fund assets at market value for the accounts and statements, as at 30 June. The ATO has named valuing only every...
- 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...
- Can an SMSF use last year's valuation?Sometimes. The ATO says a previous independent valuation can be relied on if it is still appropriate, and the trustee should assess that and document...
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.