What did the ATO do about unchanged SMSF values?
It identified funds whose reported asset values had not moved, then contacted them and their auditors. The ATO's website update, as quoted by SMS Magazine in March 2024, described a higher-risk group of about 16,500 funds that had reported certain classes of assets at the same value for at least three income years. The classes were residential and commercial property, unlisted companies and unlisted trust investments. Accountants Daily reported the same figures.
The ATO said more than 1,000 SMSF auditors were associated with those funds and that no auditor contravention reports had been lodged for potential breaches of the market valuation rules for the assets. It began sending targeted messages to trustees and auditors and said it would watch the next annual return.
A year later SMSF Adviser reported on the campaign. The ATO put the number at more than 16,000 funds and said it contacted them and their auditors in March and April 2024. The ATO's own initial evaluation, in its key messages of 8 July 2025, found around 63% of funds changed property valuations and 45% changed unlisted trust investment valuations after its market valuation letter campaign. (SMSF Adviser reported 80% and 48% in March 2025.)
Where values were not updated and no auditor contravention report was lodged, the ATO then reviewed the auditors involved and asked for their evidence. In every review finalised at that point, the auditor had not obtained sufficient evidence of market value. The ATO named two outdated practices: valuing only every three years, and not obtaining objective data on the assets underneath an unlisted unit trust. It said these can bring penalties for trustees and compliance action for auditors.
Is the ATO sending these letters now?
We cannot say. The contact described above was in March and April 2024, and results were reported in March and July 2025. We have not found an ATO notice of a new round, so this page does not claim one. What we can point to is the ATO's auditor compliance focus for 2026-27, which includes market valuation reviews under regulation 8.02B of the SIS Regulations. If you have received something from the ATO, read it closely and take it to your accountant, administrator or auditor. The ATO's original news article is no longer at its old address, which is why we cite published reports of it.
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Is an unchanged value a breach?
The test is the evidence, not whether the number moved. A value can stay the same and still be right if the evidence supports it. BDO's note on the ATO's reminder says an unchanged three-year value does not by itself mean a contravention has occurred, but the trustees must be able to support it with objective and supportable evidence. That is BDO's reading, not an ATO statement.
The ATO's guide to valuing SMSF assets sets out how. An earlier independent valuation can be relied on if the trustee assesses that it is still appropriate and documents how they reached that view. It should no longer be relied on once it has become materially inaccurate or the value has changed significantly, for example after a significant event.
What the ATO described as outdated is setting a value and leaving it for three years without testing it. Accounting Times reported the ATO also saying that if valuations fail the requirements, the fund and its members may have additional tax to pay and trustees could be liable for administrative penalties.
What evidence does the ATO guide point to for unlisted assets?
For a share in a private company or a unit in an unlisted unit trust, the guide says to consider the value of the assets in the entity and the price the fund paid. The evidence it lists includes an independent valuation of those assets, a property valuation where property is the only asset, and the date and price of the latest sale or purchase of a share or unit between unrelated parties.
If none of those exists, the directors or trustees need to show how they substantiated the value, with the data, method and assumptions. The ATO also says signed, audited statements that carry assets at cost are unlikely to be sufficient on their own. That is consistent with the ATO's concern about unlisted unit trust values with no objective data on the underlying assets.
What should a trustee do after getting an ATO letter?
Work through the evidence before anyone replies to the ATO. A practical order:
- Read what the ATO sent and note which assets and which years it mentions.
- List each asset reported at the same value and the evidence behind that value today.
- Test that evidence against the ATO guide. For an unlisted company or unit trust, look for the value of the assets in the entity, the price paid and objective data.
- Ask your SMSF auditor and your accountant or administrator what they need. The auditor checks the valuation; the trustee sets it.
- Where the evidence is thin, or the asset is a significant share of the fund or complex, get a new valuation. The ATO recommends a qualified independent valuer in those cases.
- Write down your conclusion and keep it with the audit file.
This is not advice on how to respond to the ATO. That is a matter for you and your adviser.
How does Valuation Group help?
A suitably qualified business valuer at Valuation Group values the shares or units your fund holds in a private company or unit trust, at the date you need, and writes a report built to be used as audit evidence. The valuer is independent of your fund: never a member, trustee or related party of it. Where a trust or company owns property, we value the units or shares using a property valuation from a registered or certified property valuer that you already hold.
Property held directly by your fund: we are not taking direct property valuations yet. If a trust or company owns the property, we value the units or shares using a property valuation you already hold.
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We value. We do not tell you whether to hold, sell or restructure an asset. Our 30 June valuation page covers the yearly cycle, and the unit trust and private company shares pages cover what we value.
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Questions we are often asked
How many SMSFs did the ATO contact?
As reported, about 16,500 funds in March 2024, a number the ATO later put at more than 16,000. They had reported assets such as property, unlisted companies and unlisted trusts at the same value for at least three income years. More than 1,000 auditors were involved.
Do I need a new valuation if my values did not change?
Not automatically. The ATO guide lets a trustee rely on an earlier independent valuation if they assess that it is still appropriate and document why. A new valuation or other evidence is needed if it has become materially inaccurate or the value has changed significantly.
What did the ATO find after its letters?
On the ATO's own initial evaluation, around 63% of funds changed their property valuations and 45% changed their unlisted trust valuations after the letters (ATO key messages, 8 July 2025). Where values were not updated and no auditor contravention report was lodged, the ATO then reviewed the auditors involved.
What can happen if values are not supported?
The ATO said outdated practices can bring penalties for trustees and compliance action for auditors. An auditor without enough evidence should consider a modified audit report and an auditor contravention report where the reporting criteria are met. The fund and members may also have additional tax to pay.
Can the trustees value the assets themselves?
Yes. The ATO says the trustee is responsible for the valuation, and it may be done by a registered valuer, a professional valuation service provider, a member of a recognised valuation body or a person with specific experience. For a significant or complex asset the ATO recommends a qualified independent valuer.
Will a valuation from you satisfy the ATO or the auditor?
No valuer can promise that. The auditor decides whether the evidence is sufficient, and the ATO can review a valuation and ask for the method and documents. The ATO generally accepts a valuation that follows its guide, matches the value used for any related capital gains tax event and rests on objective and supportable data. Our report is built to be used as audit evidence.
Short answers
- 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...
- 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...
- 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...
- 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...