Everything You Need to Know About "Market Value"

Are you Required to determine the market value of something for taxation purposes?

At a glance: The Tax Office has released a guide to assist taxpayers and their advisers on the processes to establish a market value for taxation purposes.

Under tax law, many taxpayers are required to ascertain the market value of items for taxation purposes.

For example, market valuation is required for the following situations:

Taxpayer -  Situation Requiring Market Valuation

Individuals -  Transfers of real estate or shares between related parties

Employees - Non-cash benefit transactions

Small Businesses - Transfers of assets to related parties,

Asset threshold tests for Capital Gains Tax concessions

Property Developers - GST margin scheme

All Taxpayers - Many anti-avoidance provisions

 

The guide, titled "Market Valuation for Tax Purposes", provides guidance on commonly valued things and supplements other advice and guidance provided on valuations.

The guide is split into 6 parts, as follows:

a) Market value for tax purposes, b) Real property and plant and equipment, c) Business valuations, d) Valuation Reports, e) Allocating value to underlying assets, and f) Tax Office processes

 

"Market Valuation for Tax Purposes" can be accessed here, at http://www.ato.gov.au

Remember, you must understand the process to establish the market value of an item for tax purposes or contac us for further clarification and advice.