Why is important to have the assets at market value

It is a legislative requirement that assets are recorded at market value, and it is this valuation that affects a member’s Total Superannuation Balance (TSB). The TSB can influence several key aspects of superannuation, including:

• The amount you can contribute into super through carry-forward concessional contributions and access to non-concessional contribution caps.
• Entitlement to claim certain government benefits such as the co-contribution or the spouse contribution tax offset.
•  The annual minimum pension payment requirement.

How to value an asset

Superannuation legislation states that market value is the amount that a willing buyer of the asset could reasonably be expected to pay to acquire the asset from a willing seller, assuming the following conditions:

• The buyer and seller are dealing with each other at arm’s length.
• The sale occurs after proper marketing of the asset.
• The seller acts knowledgeably and prudently in relation to the sale.

Who can complete the valuation

The valuation should be carried out by an independent valuer who is qualified either through holding formal valuation qualifications or by being considered to have specific knowledge, experience and judgment by their particular professional community. A valuation can be completed using an online valuation service or a real estate agent. Please note the valuation will need to have supportable data such as recent comparable sales. If you require additional guidance regarding the valuation of your fund’s asset, please contact Johnsons MME to discuss.