Preparing for a CGT Valuation | IBV™

Gather financial statements, tax returns where relevant, management accounts and the latest balance sheet. Provide debt and lease schedules, asset registers and an explanation of related party balances. Label each document by entity and period. Where accounts and management reports differ, supply a reconciliation or identify the person who can explain the difference.

Provide material customer and supplier contracts, premises terms and a summary of key staff responsibilities. Identify consent requirements, renewal dates and significant concentration. For a historical valuation, retain versions that existed at the relevant date. Do not send passwords, sensitive personal data or unrestricted client files when a de-identified summary can answer the initial question.

A practical preparation deliverable is a checklist showing each requested item, its owner, status and any unresolved questions. Add a short business narrative describing what changed during the periods supplied. This helps focus follow-up work and makes assumptions easier to test. It also prevents missing information from becoming an invisible source of apparent precision.

Before gathering records, obtain a short written instruction from your tax adviser. It should identify the transaction, entity, asset or ownership interest, effective valuation date and intended use. Clarify who will instruct the valuer and who needs to rely on the report. An instruction to “value the business for tax” can leave important questions unresolved.

The preparation plan should follow that instruction. A valuation of company shares may need ownership rights and balance-sheet information that an assessment of selected business assets would not address in the same way. A past valuation date also changes which versions of accounts, contracts and forecasts are relevant. Sending the latest documents without this context can create avoidable follow-up work.

Choose a person who can coordinate the evidence and identify colleagues able to explain individual records. This does not mean that one person must know every answer. It means requests, missing documents and changes to the instruction have a clear point of contact rather than being lost among several email threads.

Prepare the financial statements and management records requested for the scope. Relevant documents may include profit-and-loss accounts, balance sheets, trial balances and tax returns where they help reconcile the information. Do not assume a fixed number of years is suitable for every engagement; confirm the periods required with the valuer.

Use descriptive file names and separate entities. Mark draft accounts clearly and retain their relationship to final versions. If management accounts differ from signed financial statements, provide a reconciliation or identify the person who can explain why. Changes in accounting treatment, reclassifications and year-end entries can affect comparisons.

A short trading narrative is useful alongside the figures. Explain changes in activities, locations, staffing, major customers and cost structure. This helps the valuer ask focused questions rather than infer the reason for every margin change from a spreadsheet. Distinguish management explanation from independently documented evidence.

For each proposed earnings adjustment, record the amount, period, underlying transaction and supporting document. Explain why it may not represent ongoing operations and whether a purchaser would need replacement expenditure. The economic question matters more than whether the owner would prefer the cost removed.

Owner remuneration needs particular care. Describe duties, time commitments and any functions performed by family members or related entities. Removing remuneration without allowing for necessary replacement work can overstate maintainable earnings. For related-party rent or services, provide the arrangements and available evidence about commercial terms.

An adjustment schedule can use four simple fields: proposed item, source, rationale and unresolved question. Do not alter the original accounts to make them match the proposed result. Keeping the reconciliation visible allows the valuer to assess and explain which adjustments are supported and which are not.

If forecasts are relevant, supply the dated forecast, assumptions and evidence supporting sales, margins, staffing and investment needs. Identify who prepared it and whether it was revised. For retrospective valuations, preserve forecasts and other evidence available at the valuation date. Information prepared subsequently may also assist, provided it supports circumstances existing or reasonably foreseeable at that date rather than relying on hindsight.

Gather material customer and supplier agreements, premises terms and a summary of operational dependencies. Identify renewal dates, termination provisions, consent requirements and significant customer concentration. Explain which relationships depend on the owner and which are supported by transferable systems or documented arrangements.

Forecast evidence should connect to operational capacity. A planned revenue increase may require additional staff, equipment or working capital. Supplying only the revenue projection leaves the valuer unable to assess the associated costs and funding. A coherent business explanation is more useful than optimistic numbers without the resources needed to achieve them.

This is an illustrative preparation scenario, not an actual client file. An owner has final annual accounts, a draft recent management report and a shareholder agreement that was amended after the requested valuation date. The tracker records each item, its source, period, status and the person who can answer questions. It flags the missing earlier agreement rather than assuming the new version applies historically.

A second entry identifies a proposed exceptional expense adjustment and links it to the invoice and management explanation. A third flags an unreconciled related-party balance for the accountant to review. None of these entries supplies the valuation answer; they make the evidence and unresolved issues easy to inspect.

Useful tracker statuses include received, clarification required, unavailable and separately requested. Record the reason for a gap and any proposed alternative source. This avoids treating a folder as “complete” merely because many files have arrived, while a material issue remains unanswered.

Agree with IBV how confidential documents should be supplied. Provide only information relevant to the valuation, and use de-identified summaries where appropriate. Initial customer-concentration analysis can often use de-identified records with stable references. Do not send account passwords, unrestricted client files or unnecessary personal information to answer a question that an aggregated schedule can address.

Explain redactions so their effect on the evidence is understood. If the valuer requires additional detail, clarify why and agree how it will be supplied. Confidentiality should protect sensitive information without obscuring a fact material to the instructed assessment.

Before work begins, confirm the information requirements, engagement scope and agreed delivery assumptions. Your adviser remains responsible for tax eligibility and transaction requirements. Small business CGT concession evidence explains that distinction, while retrospective CGT valuations addresses the additional discipline needed for a past date.

Your tax adviser should confirm the applicable CGT requirements and eligibility conditions. A business valuation supports that assessment but does not itself determine tax eligibility. Review CGT valuation services and the central fees page. Many standard valuation engagements can be completed within approximately 5–7 business days once all required information, clarifications, signed engagement documents and payment have been received. The expected timeframe is confirmed before work begins. An enquiry alone does not start the delivery period.