The ATO campaign on unchanged SMSF values: what it means for trustees

What did the ATO do, as reported?

It used its own data to find funds reporting the same asset values year after year, then contacted the trustees and auditors. Most of the figures below come from two trade press reports of the ATO's statements: Accountants Daily in March 2024 and SMSF Adviser in March 2025. We cite them as reported. The ATO's own results come from its key messages of 8 July 2025. (SMSF Adviser reported 80% and 48% in March 2025.)

The 2024 report also said no auditor contravention reports had been lodged for potential breaches of the market valuation rules on those assets.

What did the ATO say was wrong?

It named two outdated practices: valuing only every three years, and not obtaining objective data on the underlying assets of an unlisted unit trust. As reported, the ATO said this is a breach of obligations and can mean penalties for trustees and compliance action for auditors.

The 2024 report adds that if valuations fail the requirements, the fund and its members may have additional tax to pay and could face administrative penalties. Neither report gives amounts.

The concern is not that a value is the same. It is that an unchanged number may not be market value. The ATO's valuation guide says a previous independent valuation can be relied on if it is still appropriate and documented, but not if it is materially inaccurate or the asset's value has changed significantly.

What changed for auditors?

Their evidence came under review. The ATO's auditor guidance says an approved SMSF auditor must obtain sufficient appropriate evidence, from the trustee or external sources, to form an opinion on whether assets are reported at market value, and must document it. Where the auditor cannot, the auditor must consider modifying the independent auditor's report and lodge an auditor contravention report when the reporting criteria are met.

For unlisted shares and units, the auditor guidance lists a qualified independent valuation of the entity's assets, the trustees' substantiation with data, method and assumptions, a property valuation where property is the only asset, and the latest sale between unrelated parties. The entity's own statements count as reliable evidence only if they are signed, audited and carry assets at market value rather than cost.

As reported, where values were not updated and no contravention report was lodged, the ATO started reviews of the auditors and asked for the evidence they used. In its Division 296 notice, the ATO says auditors' obligations are unchanged but accurate reporting matters, and auditors must check that sufficient and appropriate evidence supports the market value of each fund asset. See our page for accountants and auditors.

What does the ATO expect from trustees?

The ATO expects each asset to be at market value at 30 June, with evidence the auditor can check. Regulation 8.02B of the SIS Regulations requires market value in the accounts every year. The ATO's guide says trustees keep the evidence of how a value was determined and give it to the auditor, and consider a new valuation or other evidence after a significant event.

For unlisted shares and units the guide points to an independent expert valuation of the entity's assets, a property valuation where property is the only asset, or the latest sale between unrelated parties. Otherwise the directors or trustees should set out their data, method and assumptions.

Why did more funds update property than unlisted trust valuations?

The reports do not say why, and we do not speculate on the ATO's reasons. What the guide shows is that the evidence differs by asset. For real property, the ATO lists comparable sales, a recent purchase price, an independent agent's appraisal and, for commercial property, net income yield, and its auditor guidance names an independent valuation as one type of sufficient appropriate evidence.

For unlisted units and shares, the guide looks through to the entity: the value of its assets, a property valuation where property is its only asset, or the latest sale between unrelated parties. A unit price taken from the trust's own records is not, by itself, on the ATO's list of evidence. The reports do not say whether that explains the 45% figure. What an independent valuation supplies is the missing step: a market value built from the trust's underlying assets and liabilities.

What should trustees do before 30 June?

Start with the assets whose value has not moved. These six steps make the audit file easier to build:

1. List every asset and mark any with the same value as last year and the year before.
2. For each marked asset, write down what supports the 30 June value: a closing price, an exit price, a property valuation, the entity's net assets or a recent sale between unrelated parties.
3. For unlisted shares and units, obtain the entity's assets and liabilities at 30 June, with assets at market value rather than cost.
4. Where you rely on an earlier independent valuation, assess whether it is still appropriate and record why.
5. Consider a qualified independent valuer for any asset that is a large share of the fund or complex to value.
6. Ask the auditor early what evidence they will want, and provide documents when asked.

Timing matters too. Under regulation 8.03, the auditor's report is due within 28 days after the trustee has provided all documents relevant to it, so a complete evidence file shortens the audit.

Trustees decide the value. We do not know whether your fund was among those contacted, and a valuation does not settle any compliance question. If you have received an ATO letter, see ATO letters about unchanged values.

How can an independent valuation help?

It supplies the kind of evidence the ATO lists for unlisted assets, from a valuer independent of the fund: a market value for the shares or units, with the data, method and assumptions stated, in a report built to be used as audit evidence. We value; the auditor decides what is sufficient.

Annual update of a valuation we prepared last year, for the same entity with no restructure or major change: $495 + GST per entity, delivered in 2 business days. Delivery time starts once payment and all required information have been received. Accountants and administrators with several funds: We agree a delivery schedule for batches before we start.