2. Agenda
Market value and the Australian tax system – when market
value is relevant
What is market value? – relevant resources and definitions to
refer torefer to
Commonly used valuation methods
Some relevant examples
Obtaining robust evidence of market value – practical tips
2ME_128324907
3. When is ‘market value’
relevant in the Australian
tax system?
3ME_128324907
4. Market value and the tax legislation
• Purchase price allocations – eg depreciable assets
• CGT - maximum net asset value test – small business
• CGT – cost base
• CGT – market value substitution
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• CGT – taxable Australian property
• Debt forgiveness, value shifting rules and employee share
schemes
• Thin capitalisation – asset valuation
• Tax Consolidation
5. Market value and the tax legislation - other
• Trading stock
• GST – eg margin scheme partly completed developments;
pre 2000 property
• Research and development
5ME_128324907
• FBT, PAYG and non-cash benefits
• Self managed superannuation funds – fund assets
• Off-market share buybacks
• Cultural gifts programme / Donations
• Stamp Duty
• Transfer pricing – eg Guidelines re intangibles*
6. Timing of valuation
It is important to note the time at which the valuation should
be determined - eg
Consolidation – joining, formation or exit
CGT – time of CGT event
Thin capitalisation – aligned with the relevant accounting
standards
Non-cash benefits (FBT or PAYG) – broadly, market value
when benefit provided, note for PAYG, withholding must
be before benefit provided
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8. Relevant resources
Case Law
ATO: Market Valuation for Tax Purposes (“Market
Valuation Guidelines”)
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)
International Valuation Standards Council
10. What is market value?
Spencer v The Commonwealth per Griffith CJ at 432:
“...the test of value of land is to be determined, not by inquiring
what price a man desiring to sell could have obtained for it on a
given day, i.e. whether there was, in fact, on that day a willingg y, , , y g
buyer, but by inquiring: what would a man desiring to buy the land
have had to pay for it on that day to a vendor willing to sell it for a
fair price but not desirous to sell?”
Price between knowledgeable and willing buyer and seller
ME_128324907 10
11. What is market value?
Key principles recognised by the High Court:
the willing but not anxious vendor and purchaser
a hypothetical market – determining a market
the parties being fully informed of the advantages and
disadvantages associated with the asset being valued
both parties being aware of current market conditions
the parties acting at arm’s length with each other
assume the sale is not forced
11ME_128324907
12. What is market value?
Highest and best use
Market value is not necessarily the same as the arm’s length
consideration
f Market value as distinct from value, price and cost
Market value as distinct from fair value
Pioneer Concrete
Value to a third party generally – not the specific value to
the actual acquirer
12ME_128324907
13. 2. ATO Market Valuation
GuidelinesGuidelines
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14. ATO Market Valuation Guidelines
Part Summary
A Provides guidance about determining the market value for tax purposes
B
Sets out the 3 valuation processes for real property, plant and equipment that the ATO will accept. These
methods are:
• a direct, sales or market comparison approach;
• a depreciated replacement cost approach; and
• income-based approaches
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C
Sets out several valuation approaches and methods for deriving market value for a business, securities and
intangible assets including:
• market;
• income;
• asset;
• cost; and
• probabilistic
D Provides guidance on the content required in a market valuation report
E Provides guidance on how to reasonably allocate value to underlying assets
F
Sets out, among other things, the ATO’s compliance activities and its approach to ruling requests involving
market value
14
15. ATO Market Valuation Processes
The ATO may review a market value as part of its compliance / risk
assessment processes
The ATO will generally consider the following:
value of the asset/s value of the asset/s
type of asset/s involved
materiality of any potential tax adjustment
complexity of the valuation process undertaken
documentary evidence supporting the valuation
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16. ATO Market Valuation Processes
ATO Panel of expert valuers – analyse taxpayer valuations,
support ATO, provide ATO valuations
Specialist ATO internal Valuation Gatekeeper Unit
Broadly, the ATO’s valuers will consider:
how adequately the valuation process was documented
which market value definition has been used
how appropriate the method was (remember: not a science)
what assumptions and information have been relied on
Risk assessment
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18. IVSC – Professional and valuation standards
Look for your valuer to be accredited
The IVS website sets out valuation issues being consulted
on, and provides access to information about valuation
standards
International Valuation Standards are set by the IVSC and
include guidance on how to determine market value and what
it is for specific assets
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20. Valuation methods
Valuation methods:
Income approach - Forecast cash flows and NPV analysis
Market approach - What would someone else pay for that asset or a
similar asset
Cost approach - Cost to recreate that asset - limited or no goodwill assets
Use of secondary method to cross-check
Other issues
Special value generally not accepted by ATO … but consider it
Prospective market value
20ME_128324907
22. Allocation of purchase price in business acquisition contracts
The price paid for business assets may be expressed as a lump sum
The allocation of the purchase price to underlying business assets has
important taxation consequences for both the vendor and the purchaser
Tax law requires a reasonable allocation to the acquired assets
Factors to consider include:
Competing interests of the vendor and purchaser (e g vendor may have Competing interests of the vendor and purchaser (e.g. vendor may have
preference for allocation to particular assets over others)
Collis – whether allocation has been at arm’s length
Multiple CGT events – section 116-40(2) attribution; ensure allocation
Stamp duty
Acquisition accounting
22ME_128324907
23. Allocation of value – key risks
Three broad areas of risk associated with the allocation of value
whether the total transaction value is accurate
whether the taxpayer has recognised all assets to which value is
to be allocated
h th th t h ll t d l tl t h whether the taxpayer has allocated value correctly to each
underlying asset
The ATO is likely to accept that values reflect market value where
parties deal with each other at arm’s length and agree in a bona fide
manner on the value of underlying assets
Sale Agreements
ATO risk matrix
23ME_128324907
24. Small business relief
Maximum net asset value test – basic relief condition in Div 152-A
Key traps/issues
Miley - control premium
AAT held that the purchaser had in this case paid a premium for
complete control of the company. Market value of taxpayer’s shares
was not his share of the sales proceeds, but actual market value.
Excellar – GST liabilities
the GST component of certain liabilities was included in the MNAV
calculation. A taxpayer’s entitlement to input tax credits has no relevant
implication in the circumstances
Bell – incurring debt to preserve assets was not sufficient to ‘relate to
assets’
Debt not taken into account when determining MNAV text
24
26. Cost base
Five elements of the cost base
1. Money paid or the market value of property given for the CGT asset
2. Incidental costs of acquiring the CGT asset
3. Costs of owning the CGT asset
4. Capital costs to increase or preserve the value of the CGT asset or top p
install or move it
5. Capital costs of preserving or defending the title or rights to the CGT
asset
Section 103-5: where a payment cost or expenditure involves providing
property, the market value of the property is used.
If registered for GST, the elements of the cost base are reduced by the
amount of any GST net input tax credits included in the cost
26ME_128324907
27. Example – Scrip for scrip transaction: Vendor
• Transaction – ListCo acquires shares in
PrivateCo from Vendor in exchange for the
issue of ListCo shares
• What is the cost base of the ListCo shares
i d b V d f th l f th i
ListCo
New issue of shares = $100
Shareholder / Vendor of
Private Co
received by Vendor for the sale of their
PrivateCo shares to ListCo?
• Determining the market value of property
provided – PrivateCo shares
27
PrivateCo
Acquisition of 100% of shares
Value of shares = $90
Control Premium = $10
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28. Example – Scrip for scrip transaction: Purchaser
• Transaction – ListCo acquires shares in
PrivateCo from Vendor in exchange for the
issue of ListCo shares
• What is ListCo’s cost base in the PrivateCo
shares received? ListCo
New issue of shares = $100
Shareholder / Vendor of
Private Co
• Market value of ListCo shares provided - is
this the ListCo shares’ ASX price? (issues
such as volatility?)
• Practical issues may arise in determining
cost base where neither ListCo nor PrivateCo
are traded on an active market.
• Potential for unrealised gain in PrivateCo
shares
28ME_128324907
PrivateCo
Acquisition of 100% of shares
Value of shares = $90
Control Premium = $10
30. MVSR for cost base – general rules
Where an asset is acquired from another entity, the market value of the asset
(at time of acquisition) is deemed to be the first element of its cost base if:
there was no expenditure incurred it acquire it
some or all of the expenditure incurred to acquire it cannot be valued, or
the transaction was not completed at arm’s length the transaction was not completed at arm s length
However, if the transaction was not completed at arm’s length and did not
give rise to a CGT event for the counterparty, the market value will only be
substituted if what was paid to acquire the asset was more that its market
value at the time of acquisition
Example: Tom gifts land to his daughter Sarah with a market value of
$400,000. The first element of the cost base or reduced cost base for
Sarah of the land is $400,000
30ME_128324907
31. MVSR for capital proceeds – general rules
The MVSR is relevant if:
no capital proceeds received from a CGT event
some or all of the capital proceeds cannot be valued, or
the parties did not deal at arm’s length in connection to the CGT
tevent
The MVSR will always apply to CGT event C2 (about cancellation,
surrender or similar endings) unless the more appropriate event is
CGT event C1 (about assets being lost or destroyed)
Some exceptions to the MVSR – section 112-20(3)
The market value is worked out at the time of the CGT event
31ME_128324907
32. Mirror image: example – CGT events for both parties
Transaction
A sells to B an asset that A purchased on
market for $1 with a market value of $100
B provides $1 of consideration to A for the
asset
B then sells the asset two days later to C for
A
Cost base of asset: $1
Capital proceeds from sale to
B: $100 (MVSR)
Capital gain to A: $99
Cost base of asset: $100 B then sells the asset two days later to C for
$110
Analysis
The market value substitution rule should
apply as the transaction will give rise to a
CGT event for both A and B
There will be a step up in the cost base for B
This prevents double taxation of the same
economic gain
32
B
C
Cos base o asse $ 00
(MVSR)
Capital proceeds from sale to
C: $110
Capital gain to B: $10
A’s capital gain: $99
B’s capital gain: $10
Total capital gain: $109*
*Being $110-$1
ME_128324907
33. No mirror image example – CGT event for one party
Transaction
Company A issues shares with a market
value of $100 to Shareholder B
Shareholder B provides consideration of $1
for the issue of shares
Company A
No CGT event for Company A
on issue of shares
Shareholder B sells the shares to C two
days later for their market value ($100)
Analysis
MVSR will not apply to step up the cost
base for Shareholder B. This is because
there is no corresponding gain to assess.
33
Shareholder
B
C
Cost base of shares issued by
Company A: $1
Capital proceeds from sale to
C: $100
Capital gain: $99
Overall gain: $99
ME_128324907
35. What is taxable Australian property?
Direct Australian real property interests including interests in Australian land
and rights to mine minerals in Australia
Indirect Australian real property interests, which are interests in an entity,
including a foreign entity, 10% or more of the entity is held and value is
principally attributable to Australian real property
CGT assets that are used in carrying on a business through a permanent
establishment (PE) in Australia (always TAP assets even if cease to be held
through a PE)
Taxable Australian property also includes an option or right over any of the
above interests
35ME_128324907
36. The principal asset test
Requires a comparison of the market values of the entity’s taxable Australian
real property (TARP) and non-TARP assets
If the principal asset test is satisfied, a foreign resident who would otherwise
disregard their capital gain and who satisfies the non portfolio test, must
include that capital gain in their Australian assessable income
Note this test is similar to most of Australia’s double tax agreements which
refer to value of underlying shares being principally related to Australian land
DTAs apply to capital and revenue
DTAs do not have a non portfolio test requirement
36ME_128324907
37. When does Division 855 apply to tax non-residents on capital
gains?
France
Co
France
S bC
Sing
JVCo
SingCo
60% 40%
STEP 2: Assuming that the only asset held by
Sing JVCo is the shares in Aus Tax Group, we
now use the results of Step 1 to arrive at the
level of TAP held by SingCo
Result: As the value of SingJVCo’s TAP is
greater than its non-TAP, and SingCo has
an interest greater than 10% in Sing JVCo,
SingCo will be subject to Australian CGT on
disposal of the shares in Sing JVCo.
37
France
SubCo
AUS tax group
JVCo
AUS tax Group
Singapore
Australia
$75 LAND $25 NON-
TAP
STEP 1: Split shares in Aus Tax Group into two
categories:
TAP ASSET: 100% x $75 = $75 TAP
NON- TAP ASSET: 100% x $25 = $25 NON-TAP
100%
level of TAP held by SingCo
TAP ASSET: 40% x $75 = $30 TAP
NON- TAP ASSET: 40% x $25 = $10 NON-TAP
38. The principal asset test – valuation issues
Intercompany assets
Ignored under new integrity rules – not an intention test
Fixtures v plant
Tenants fixtures
Statutory severanceStatutory severance
Mining information
Is information a TARP asset?
Appropriate valuation methodology for information – cost approach?
Should valuation of the information be undertaken separately or as a ‘package’ with other
assets?
Resource Capital case
Dealings with ATO on audits and compliance activity
38
39. Resource Capital
RCF III Limited
Partnership
Cayman Islands
Limited partners
(US residents)
General partner
(Cayman Island resident)
97%
>10%
39
St Barbara Mines
Limited
Australian company
TARP
assets
>10%
40. Indirect Australian real property interests
Transitional rule – former Div 136 taxed foreign residents if the asset had a
necessary connection with Australia
The first element of the cost base of a CGT asset on 10 May 2005 is the
market value of the asset on that day if, on that day:
the CGT asset was a membership interest the taxpayer held in anotherthe CGT asset was a membership interest the taxpayer held in another
entity
the taxpayer was a foreign resident, or the trustee of a trust that was not a
resident trust for CGT purposes
the CGT asset was a post-CGT asset, and
the CGT asset did not have the necessary connection with Australia
Grandfathering of pre May 2005 gains – need to demonstrate value at that
time
FILE NUMBER 40
42. Market value and debt forgiveness
Relevant to debtors who have commercial debts forgiven
Assignments
Debt for equity swaps
Calculation of the gross forgiven amount may involve valuation of
propertyproperty
Offset amount for property provided is equal to the market value
of that property at the time it is provided
GFA on a debt for equity swap will depend on the market value of
the shares issued in the debtor company.
How can a wholly owned subsidiary be valued?
Insolvent debtors
42ME_128324907
44. Value shifting
General value shifting regime (GVSR)
Several exclusions and safe harbours
Market valuation is central to value for the purposes of the GVSR
Both direct value shifting and indirect value shifting are premised on
th bilit t l it d l i t t i th l t titithe ability to value equity and loan interests in the relevant entities
Deemed gain on direct value shifts – similar to a disposal
Cost base adjustments only for IVS
De minimis
Both DVS rules and IVS rules have thresholds – important to
document compliance if taxpayer is relying on de minimis rules
44FILE NUMBER
46. ESS and market valuation
Central to the operation of the ESS rules is the ability to determine
the market value of the shares, options or other rights
Discount on issue as a ‘gateway’
Market value at ESS Deferred Taxing Point being assessable as
income (less any cost)income (less any cost)
Unlisted ESS interests
Safe harbour method for valuing options/rights in the Regulations
Start up options/rights
No value?
Concessions from 1 July 2015
46FILE NUMBER
48. Asset valuations for thin capitalisation calculations
An entity to which the thin capitalisation rules apply must comply with the
relevant accounting standards in determining the value of its assets
Adoption of the Australian equivalents to International Financial Reporting
Standards (AIFRS) from 1 January 2005
Modifications to the rules regarding the recognition and valuation ofg g g
assets, liabilities and equity capital under the thin capitalisation regime
were required
For thin capitalisation purposes, an entity has an asset at a particularly time
only if the accounting standards enable or require that asset to be recognised
at that time
Key exceptions – deferred taxes, defined benefit assets/liabilities and
internally generated intangibles
48ME_128324907
49. Asset valuations for thin capitalisation calculations
Revaluing assets up may increase the safe harbour asset base
Statutory accounting values used as a starting point, including any
revaluations up (or impairments down)
Where there is no specific accounting standard relevant to an asset or
liability the valuation must be in accordance with an appropriateliability, the valuation must be in accordance with an appropriate
accounting policy per AASB 1001: Accounting Policies (AASB 1001)
The Commissioner considers that compliance with AASB 1001 would
include demonstrating that the process and judgement used for selecting
the accounting policy that was used to value the assets has followed the
order of preference set out in AASB 1001
49ME_128324907
50. Asset valuations for thin capitalisation calculations
Specific rules for thin capitalisation relax the accounting requirements
An entity may revalue one or more assets in a class of assets (but not
all of the assets in that class, which would have been a requirement of the
AASBs), provided that no asset in the class has fallen in value since the
most recent valuation of the total value of assets in that class
Carried out by an independent expert or by an internal expert provided
there is no other conflict of interest and the revaluation is verified by an
external expert
Special requirements where an asset revaluation is carried out by an
employee of the entity or by someone who performs services for the
entity under a similar kind of arrangement
50ME_128324907
51. Asset valuations for thin capitalisation calculations
The entity must keep records of the revaluation unless an exception applies
Statutory account exception
Intangibles with no active market exception
The records must contain particulars of:
The methodology used in the revaluation, including any assumptions;
How the methodology was applied, including any relevant data and other
information used;
The name and credentials of the expert making the revaluations; and
The remuneration and expenses paid to the expert
Additional record-keeping requirements if the revaluation was undertaken by
an internal expert
51ME_128324907
52. Thin capitalisation and internal intangibles
Specific rules permit the recognition of intangibles on a thin capitalisation
balance sheet even though the intangibles are not capable of recognition
under AASB 138
Removal of ‘active market’ condition
The items traded in the market are homogeneousThe items traded in the market are homogeneous
Willing buyers and sellers can normally be found at any time, and
Prices are available to the public
Key focus area for the ATO
Reduction in safe harbour – sharply increasing revaluations
Potential write downs of other assets
Degree of judgment involved
52FILE NUMBER
53. Assets with no active market – thin cap concession
For thin capitalisation purposes, if there is no active market to provide an
entity with the conditions to use the revaluation model in AASB 138, an entity
can choose to revalue one or more of those assets for the relevant period
under subsection 820-684(2)
R l ti d ti 820 684 i d t b d t k i th Revaluations under section 820-684 are required to be undertaken in the
same way as subsection 820-680(1)
Entity must comply with the accounting standards as if the revaluation
were allowed by those standards
Impairments
Frequency
Other requirements of AASB 138
FILE NUMBER 53
55. Tax cost setting
Tax cost setting is a method of apportionment which requires
allocation of an amount of tax cost calculated (ACA) to the
underlying assets of an entity
Allocation on entry to underlying non-monetary assets is proportional
t d i l ti t t d b th k t l fto, and in relation to revenue assets capped by, the market value of
the asset
Market valuations can also be relevant on exit, where the exit ACA is
allocated between classes of membership interests being sold
55ME_128324907
56. Tax values in consolidation
Market valuations are required in consolidation to:
Calculate the ACA for subsidiary members
Step 1 is limited by the market value of the membership interests
Step 2 intercompanies are limited by market value of corresponding receivables
Allocate ACA between non-monetary assets and to cap revenue asset TCSAy p
Changing the relative market value of assets can change the allocation of ACA and the
cap applied to revenue assets such as depreciating assets
Calculate the pre-CGT proportion of membership interests in a joining entity
Establish and adjust the available fraction attached to losses transferred to a consolidated
group
Example – diluting the AF on a subsequent equity issue or non arm’s length transaction
Allocate of exit ACA between membership interests
56ME_128324907
57. Consolidation example – capping
Example 1 does not cap PP&E and Example 2 shows the impact of the capping provisions
Example A – Capping does not apply Example B – Capping applies
Total ACA calculated $2 000 Total ACA calculated $2,000
57ME_128324907
Total ACA calculated $2,000
Market value Reset TCSA
Cash $100 100.00$
PP&E $900 $1,554.55
Goodwill $200 $345.45
$1,200 $2,000
Total ACA calculated $2,000
Market value Reset TCSA Cap (MV) Reset
Cash $100 100.00$ 100.00$
PP&E $900 $1,554.55 1,500.00$ $1,500.00
Goodwill $200 $345.45 $400.00
$1,200 $2,000 2,000.00$
58. Consolidation example – skew to PP&E
The impact of changing market values can be illustrated in the following examples, which
both assume ACA of $1,000 is allocated to underlying assets. Example A does not have any
rights to future income. Example B splits RFI from goodwill
Example A – Goodwill includes RFI contracts
Total ACA calculated $1 000
Example B – RFI contracts split out
Total ACA calculated $1 000
58
Total ACA calculated $1,000
Market value Resert TCSA
Cash $100 100.00$
PP&E $900 $736.36
Goodwill $200 $163.64
$1,200 $1,000
Total ACA calculated $1,000
Market value Resert TCSA
Cash $100 100.00$
PP&E $900 $771.43
RFI $50 $0.00
Goodwill $150 $128.57
$1,200 $1,000
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59. Available fractions
Available fraction is intended to be an approximation of the income
generating capacity of the real loss-maker measured as a proportion of the
income generating capacity of the group as a whole
Initial calculation of available fraction for a bundle of losses
modified market value of real loss-maker
at initial transfer time
transferee’s adjusted market value
at the initial transfer time
Adjustments to AF depend on increases in market value of transferee
Value attributable to tax losses and franking credits
Impact on purchase price of AF
FILE NUMBER 59
60. Using valuation ‘shortcuts’ in consolidation
Certain shortcuts may be used to provide a reasonable approximation of
the market value of an asset for the purpose of setting asset costs
Use of shortcuts reduces risk of ATO undertaking a market valuation
review of the assets for which the shortcut options have been usedp
The decision to use a particular shortcut must generally apply to all of an
entity’s assets that are eligible for that shortcut
Shortcuts not available where there is an intention to sell
Not available for calculating a joining entity’s market value for the purpose of
determining the maximum use of transferred losses
60ME_128324907
61. What are the valuation ‘shortcuts’?
Valuation
shortcut
Type of asset Valuation option
1 Depreciating assets (not including intangible
assets) that have not been depreciated on an
accelerated basis, whose individual adjustable
values are 1% or less of the joining subsidiary's
allocable cost amount (ACA)
Adjustable value (which can be revised to ignore any
balancing adjustment amount that reduced the adjustable
value) can be used as market value
2 Depreciating assets (not including intangible Adjustable value revised to ignore the effect of2 Depreciating assets (not including intangible
assets) that have been depreciated on an
accelerated basis, whose individual adjustable
values are 1% or less of the joining subsidiary's
allocable cost amount (ACA)
Adjustable value, revised to ignore the effect of
accelerated depreciation (and which can be revised to
ignore any balancing adjustment amount that reduced the
adjustable value), can be used as market value
3 Trading stock (other than livestock and growing
crops) that is not a retained cost base asset
Terminating value at the joining time may be used as
market value except in certain circumstances
4 Employee share scheme shares Existing market valuation (updated if appropriate)
5 Unlisted shares Existing market valuation (updated if appropriate)
61ME_128324907
63. Tip 1: ATO Valuers Panel – external members
•Aon Risk Services Australia
Limited
•CIVAS (ACT) Limited (Colliers
International)
•Crowe Horwath Corporate
Finance
•KordaMentha Pty Ltd
•KPMG
•Lonergan Edwards & Associates
Limited
•Opteon Property Group
•PPB Advisory
63FILE NUMBER
Finance
•Ferrier Hodgson
•Frontier Economics Pty Ltd
•Gaffney, Cline & Associates
Pty Ltd (WA)
•Griffith Hack Consulting Pty
Ltd
PPB Advisory
•PricewaterhouseCoopers
•Revaluate Pty Limited
•Romar Valuation Services
•Sapere Research Group Limited
•Value Advisor Associates Pty Ltd
64. Tip 2: Instructions
Create best evidence – risk proof your client
ATO “Form for instructing your Valuation Consultant” – reference to
ATO Market Value Guidelines, Court expert guidelines, APES 225
Accounting Professional Ethical Standards Board APES 225
Valuation ServicesValuation Services
For accounting professionals in Australia APES 225 sets out
standards for valuers
Independence, confidentiality, competence, documenting terms of
engagement, providing written Valuation Reports – all covered
64FILE NUMBER
65. Tip 3: For complex assignments - consider two
valuers
Take two out – one as independent valuer; one as “dirty” expert to
assist and guide with instructions and appropriate methodology and
how to use the report provided to support the tax issue
As per Tip 4 save money by directly engaging with the ATO eg by
considering a joint valuation with the ATO
FILE NUMBER 65
66. Tip 4: Engagement with the ATO
Binding rulings - generally only rule on how a relevant
provision applies to a particular taxpayer in relation to a
particular scheme – cost may be an issue
Advance Market Valuation Agreements (AMVA)
Values are set for assets and entities for consolidation
purposes - administratively binding on the ATO
Other engagement with the ATO – eg early engagement
processes; joint valuations
FILE NUMBER 66
67. Tip 5: Avoid disputes - elements of a good valuation
The following elements should be apparent, as appropriate:
• description of asset
• purpose and context of valuation
• date of valuation
• material risks
• use of previous valuations
• explanation of material differences
• method/s used
• reasons for method/s used
• specific value
• information relied on and evaluation of
information
• assumptions relied on and evaluation of
assumptions
• expert reports and the use of experts
• terms of engagement
• relationship between the valuer and the
client
• working papers
• disclaimers and indemnities
• valuer’s details
67
68. Tip 6: manage a valuation dispute with the ATO
In the event of a dispute with the ATO, the burden of proof rests with
the taxpayer
Litigation or Alternative Dispute Resolution (ADR) – consider ADR
ADR processes ADR processes
joint appointment of an independent valuer
expert valuer conferencing (a “hot tub”)
Independent Review
Early Neutral Evaluation
FILE NUMBER 68