Business Valuations for the 1 July 2027 CGT Changes
Independent market valuations of private business interests at 1 July 2027, for business owners and their advisers in Brisbane, on the Gold Coast and Australia-wide.
Independent market valuations of private business interests at 1 July 2027, for business owners and their advisers in Brisbane, on the Gold Coast and Australia-wide.
From 1 July 2027 the 50% CGT discount is replaced by cost base indexation and a 30% minimum tax on capital gains accruing from that date, for individuals, trusts and partnerships (some individuals will be excluded). The law is now in place under the Tax Reform No. 1 Act 2026, and further changes are being consulted on.
Growth up to 1 July 2027 keeps the old rules. Growth after it is taxed under the new rules. The gain up to 1 July 2027 is not taxed then; it is deferred until the asset is actually sold. Pre-CGT assets are treated as sold and bought back at market value on 1 July 2027.
There are two ways to set that split, a market valuation at 1 July 2027 or a default formula that assumes the gain built up evenly over the whole time the asset has been owned. If most of the growth happened before July 2027, as it often does in an established business, a valuation can keep more of the gain under the old rules. For a rental property or listed shares, that value is easy to find. For a private business, it is not.
Shares or units in a private business have no market price. A credible value has to be assessed, and it is far harder to rebuild years after the date.
An interest in a private company, or in a family trust that owns a business, has no listed price to point to.
Reconstructing a 2027 value in 2030 or 2032 is harder, more costly and easier to challenge.
The value may later be reviewed by the ATO, or relied on in a family law matter or an estate.
It has warned it will scrutinise valuations inflated or deflated to obtain a tax advantage, and the onus is on the taxpayer to show the value is accurate.
A higher 1 July 2027 value keeps more of the gain under the 50 per cent discount, so the number will be looked at closely.
The default formula assumes the gain built up evenly. If most of the growth came before July 2027, as it often does in an established business, a valuation can keep more of the gain under the old rules.
Not every business owner will. The point is to sort the clients who need one from those who do not, well before the date.
Free one-page checklist
A five-minute check for business owners, accountants and advisers. Five questions, worked through in order, to sort the clients who need a valuation from those who do not.
PDF, one page. Prepared by Graeme Bailey, Director, Envision Forensics.
The ATO has said it will scrutinise 1 July 2027 values and that the onus is on the taxpayer. A value set now may not be looked at for years. When it is, it needs to stand on its own.
Independent of whoever prepares the tax return, with no interest in the number.
Follows recognised standards (IVS and APES 225) and uses a recognised method, such as capitalisation of earnings, with a cross-check.
Every assumption documented and supported, including the capitalisation or discount rate, using the records at 1 July 2027 without the benefit of hindsight.
Signed by a suitably qualified valuer, to the standard applied when giving expert evidence under APES 215.
Each valuation is scoped to the business and the reason it is needed. Work is overseen by senior experts who remain accountable for the conclusions.
A confidential conversation to confirm whether a valuation is needed and what scope suits.
Financial statements, tax returns, management accounts and ownership details at or near the date.
Method selected, earnings normalised and assumptions tested against the evidence.
A concise report setting out the value, the method and the reasoning, ready to keep on file.
Common questions about valuations for the 1 July 2027 CGT changes.
No. Owners selling before the date, businesses held in a company or complying super fund, and sales clearly covered by the small business CGT concessions may not need one. The checklist helps sort which clients do.
As at 1 July 2027, not before. The ATO has confirmed a valuation can't be forward-looking. It can be finalised once the results to 30 June 2027 are available, ideally within a few months of the date while records and market evidence are current. Sorting which clients need one, and getting their records in order, should start now.
Yes, provided the records and supporting information are available. The further from the date it is prepared, the harder that becomes, which is why getting the records in order now matters.
Companies and complying super funds sit outside the new rules. The owners' shares or units in the company may still be affected, depending on how they are held.
Pre-CGT assets acquired before 20 September 1985 come under the new rules for growth after 1 July 2027. The market value on that date becomes the new cost base, so a valuation is strongly recommended.
It avoids the cost of a valuation, but it assumes the gain built up evenly over the whole time the asset has been owned. If most of the growth happened before July 2027, as it often does in an established business, a valuation can keep more of the gain under the old rules. We can help work out which approach fits a particular business.
On 19 October 2026 the ATO confirmed that a valuation doesn't need to be in place on 1 July 2027 and shouldn't be obtained before then. It has also warned that it will scrutinise valuations inflated or deflated to obtain a tax advantage. Further guidance will cover the records needed and the types of professionals to consider when seeking a valuation.
Yes. We work alongside the client's existing advisers. In these engagements, our role is limited to the valuation, which keeps it independent of the people who rely on it.
General information only, not tax advice. Your tax adviser should confirm how the changes apply to your circumstances.
Get in touch for a confidential discussion about your matter.
Speak with our team about whether a valuation is needed, the scope and the timing.