16Valuations

16 Valuations

(1) The *market value of a *private ancillary fund’s assets (other than land) must be estimated at least annually.

Note: See section 2B of the Acts Interpretation Act 1901 for the meaning of ‘land’.

(2) The *market value of land must be estimated at intervals of no more than 3 *financial years. Except as otherwise provided by this section, each estimate of the market value of land is to be used until a new estimate is obtained. (3) Subject to subsections (4) and (7), the trustee may itself estimate the *market value or arrange for a qualified valuer or another appropriate entity to make an estimate.

Note 1: It is not intended that making or arranging for an estimate of market value be onerous or expensive. However, it may be prudent for a trustee to consider using a qualified valuer if the value of an asset represents a significant proportion of the fund’s value or if the nature of the asset means that a valuation is likely to be difficult or complex.

Note 2: The trustee may ask the Commissioner to undertake a valuation. The Commissioner may charge the trustee for undertaking a valuation, see section 359-40 in Schedule 1 to the Act.

(4) However, the *market value of land must be estimated by a qualified valuer or by the Commissioner. (5) An estimate must be of the *market value as at the end of the relevant *financial year. (6) An estimate must be conducted within 2 months before or after the end of the relevant *financial year for each asset unless to do so would be unnecessarily onerous and expensive. All estimates must be completed no later than before the fund is required to give to the Commissioner its *income tax return for the relevant *financial year.

Note: A private ancillary fund is required to lodge an income tax return even if it is exempt from income tax. The Commissioner will approve an appropriate income tax return form for private ancillary funds.

(7) If the Commissioner considers an estimate of the *market value of any asset to be unreasonable, the Commissioner may request the trustee to arrange for another estimate to be obtained in the manner the Commissioner stipulates. The trustee must comply with the request.

Note: The Commissioner may seek the trustee’s agreement to undertake the valuation or the trustee may ask the Commissioner to undertake the valuation. Where the Commissioner undertakes a valuation, the Commissioner may charge the trustee for undertaking that valuation, see section 359-40 in Schedule 1 to the Act.

(8) Whoever makes the estimate must base it on reasonably objective and supportable data. The methodology and data used for an estimate must be documented in the fund’s records. Where an estimate is obtained from a qualified valuer, the trustee must also obtain from the valuer a written estimate which also sets out the valuation methodology and refers to any supporting materials used in making the estimate.