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  • Determining market value for tax purposes

    Many tax laws require the taxpayer to determine the market value of something. Common instances include:

    • for individuals – transfers of real estate or shares between related parties, such as family members
    • for employees – non-cash benefit transactions, such as gifts, or other benefits, such as car parking
    • for small businesses – transfers of assets to related parties, or passing the asset threshold tests for the small business capital gains tax concessions
    • for property developers – the GST margin scheme
    • for businesses – consolidation events
    • for all taxpayers – many anti-avoidance provisions.

    You should assess market value on the basis of the 'highest and best use' of the asset as recognised in the market.

    The acceptability of a valuation for tax purposes usually depends on the valuation process undertaken rather than who conducted it. However, there are some exceptions where a professional valuer must be used.

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      Last modified: 18 Aug 2017QC 21245