Private rulings and valuations fact sheet
Working out or confirming the value of a thing for tax purposes
We administer the tax laws and provide advice and guidance on how they apply. If you need help understanding and meeting your tax obligations, private rulings are one form of advice we can give you.
How do you get a private ruling on the value of something?
Under the law, you can apply for a private ruling about the value of a thing, such as an item of plant. When you do this, you have two choices:
- ask us to provide a valuation of the thing, or
- provide us with a valuation of the thing and ask us to confirm it.
We may use a professional valuer to undertake or review your valuation. The valuer charges us a fee, which the law allows us to pass onto you. Consequently, when you apply for a private ruling requiring a valuation, you must pay for the work of the valuer.
We cannot provide a private ruling to determine or confirm – either the:
- appropriateness of a valuation methodology
- value for a future event.
Cost to you for valuation
Whenever we use a professional valuer, we will first give you an estimate of how much they will charge. You will need to pay the amount before we proceed.
You can withdraw your application for a private ruling if you do not want to proceed with, or pay the cost of, the valuation. To withdraw your application, contact us and quote your case reference number. We will confirm the withdrawal in writing.
If you withdraw your application after the valuation work has started, you will need to pay for the work already done by the valuer.
If you provide us with a valuation that meets the requirements set out in Market valuation for tax purposes (NAT 72508), it will generally cost less to confirm it than to undertake a new valuation.
If we decide that the valuation you provide is not acceptable, before we issue you with a private ruling, we will ask you to advise whether you want to either:
- submit a new valuation for review
- ask us to provide you with a valuation.
You will need to pay any further costs the professional valuer charges us.
If we do not receive your advice, we will issue a private ruling stating that your valuation is not acceptable; we will not provide an alternative valuation.
If you have any questions or concerns about the process, contact your case officer.
What happens when you apply for a private ruling about the value of a thing?
When we receive your application for a private ruling, asking us to determine or confirm the value of a thing, the following occurs:
- If we need to use a professional valuer, before we start the valuation process we will tell you, and ask you to agree, in writing, to use a professional valuer.
- We will ask for your input when selecting and instructing a valuer.
- We ask the professional valuer to provide a quote for the work – either to value the thing, or to review the valuation you have supplied.
- We will provide you with a copy of the valuer's quote, which contains
- the cost of their work
- time it will take to provide a report
- any additional information they require to complete the work.
For complex valuation cases, the valuer may need to do the work in stages. In these situations, they will provide a quote for each stage, before starting work on that stage.
- Before the valuer starts work, we will ask you to
- pay the estimated amount for the relevant stage
- provide any additional information the valuer requested.
Within 28 days of receiving the quote, you need to pay us the quoted amount. This may be the whole amount or the amount for the stage.
We will not ask the valuer to do the work until we receive your payment.
- Once we receive your payment, we will
- ask the valuer to start the work
- send you a receipt for your payment.
The receipt we issue is also a tax invoice – you may be able to claim the GST included in the valuer’s fee as a GST credit.
As the cost of the valuation work is considered to be a cost of managing your tax affairs, it may be deductible for income tax purposes.
- We will tell you:
- when the valuation is finished or confirmed
- if there are any changes to the final cost of the valuation or review.
- We will either:
- refund any extra amount you paid
- ask you to pay any shortfall.
If there is a shortfall, you need to pay this before we provide your private ruling.
- Generally, we will complete your private ruling within 28 days of receiving the valuer's report.
Private rulings involving a valuation may take longer than other private rulings, because we need to engage a professional valuer. Generally, we will contact you within 14 days of receiving your application to discuss an appropriate reply date.
A fact sheet for taxpayers, tax agents and professionals