Key takeaways
Preserve business records before access or responsibilities change
After an owner dies or loses capacity, historical budgets, contracts and ownership records can become harder to recover as people and systems change. Ask authorised advisers to preserve a dated record inventory through lawful access, supporting valuation work without assuming that collecting the documents determines who inherits the business.
Identify the interests inherited rather than assuming ownership
Inheriting company shares is different from directly inheriting the company’s land, equipment or other assets, and personal loans may be separate interests. Ask advisers to trace ownership and have the valuation explain dependence on separately held property or funding, without deciding the beneficiaries’ legal entitlements or rights to those assets.
Confirm tax requirements before commissioning an inherited valuation
An owner’s death does not automatically reset every inherited business interest to market value for tax purposes, because different rules and exceptions may apply. Ask the accountant to identify the required records, date and purpose, keeping estate administration, tax work and current succession assessments clearly labelled rather than interchangeable.
Compare what each succession package actually involves
Receiving an operating business can bring management duties, funding demands and trading risk that differ from receiving an investment asset of similar stated value. Ask for scenarios showing assets, liabilities and cash needs together, using the valuation to inform family discussions rather than assuming business value is immediately distributable cash.
Track changes between the valuation and eventual transfer
Distributions, new capital, asset sales and trading changes after a valuation can explain why the eventual transfer amount differs from the earlier assessment. Keep a separate movement schedule and ask advisers whether an update is needed, rather than rewriting history or treating the valuation as a decision on beneficiary rights.
Separate administration from planning
An estate instruction may need value at a past date, while succession planning may compare current ownership arrangements. Identify which decision the report supports and who is authorised to instruct. The relevant asset might be shares, partnership rights or a business held through a trust, rather than an interest owned directly by the deceased or retiring owner.
Trace ownership and entitlements
Supply wills or relevant extracts where appropriate, entity registers, agreements, loan records and financial statements. Legal advisers should clarify disputed entitlements and any restrictions on access to information. The valuation scope should distinguish estate assets from assets controlled by related entities, without assuming that control and beneficial ownership are the same thing in every arrangement.
Assess continuity after an owner exits
A business may depend on the owner’s relationships, licences or management work. Analysis should consider how those contributions would be replaced and whether contracts or operational arrangements continue. This is different from simply capitalising the latest profit, especially where a death or retirement affects the business’s capacity to maintain earnings at the instructed valuation date.
Signed
A clear valuation conclusion starts with an agreed purpose, relevant evidence and disclosed assumptions. The report identifies the interest valued and explains the reasoning behind its conclusion.
Explain values for the intended decision
The report can set out the interests valued, assumptions about continuing operations and treatment of shareholder loans or surplus assets. For planning, separately scoped scenarios may help advisers understand proposed ownership changes. The deliverable should identify what has actually been valued and avoid implying that a valuation alone resolves how an estate should be distributed.
Keep legal and tax advice distinct
Probate requirements, beneficiary rights and tax consequences require advice specific to the estate and jurisdiction. A business valuation does not determine those matters. Where the instruction concerns a historical date, retrospective valuation can address the available contemporaneous evidence; family agricultural interests may also require farm succession valuation.
Preserve the business record before responsibilities change
Identify who can lawfully access accounting systems, banking records and customer information following an owner's death or incapacity. Ask authorised advisers to arrange preservation of relevant records, including historical versions of budgets and ownership documents. A later reconstruction becomes harder if system access disappears or a replacement manager overwrites the forecasts used by the former owner.
Build a dated handover inventory rather than collecting only the latest accounts. Include key contracts, insurance records relevant to the business, loan agreements and evidence of informal family arrangements. The purpose is not to decide who inherits each item. It is to give the authorised decision makers a reliable record of the business interests and obligations that require valuation or separate legal consideration.
Distinguish inherited shares from underlying business assets
If an estate holds company shares, the subject is not automatically each asset owned by that company. Establish which loans, partnership interests or other claims were personally held and which remain inside related entities. A separate schedule should identify ownership evidence and any legal question requiring resolution. Control exercised during life is not a sufficient substitute for tracing the relevant interest.
This distinction matters when a beneficiary receives shares while another receives a loan receivable or property used by the business. Their economic exposures can be very different even if a family schedule gives them similar headline amounts. Model the business's dependence on those separately held assets and explain the assumptions about continued access, rent and repayment without deciding the beneficiaries' legal entitlements.
Do not assume death resets every tax cost base
The ATO's inherited asset guidance distinguishes assets acquired by the deceased before and after 20 September 1985, with different general cost base rules and specified exceptions. A date of death market value is therefore not a universal tax reset for every inherited business interest. The accountant should identify the relevant rule and records required before a tax valuation is commissioned. 1
Keep any estate administration valuation distinct from a separately instructed tax assessment. A current succession value may also differ from both. Use clear labels for each date and purpose so a historical figure is not inadvertently adopted for a later transfer, beneficiary negotiation or funding application. The valuer supplies the instructed evidence; the accountant determines tax treatment.
Compare succession packages rather than isolated numbers
A successor taking the operating business may also take management work, working capital demands and exposure to trading volatility. Another family member receiving an investment asset has a different combination of risk and liquidity. A valuation can describe these differences without deciding what a fair family allocation must be.
Prepare planning scenarios that show assets, liabilities, expected business cash needs and separate family payments. Do not treat a business's assessed value as cash available for immediate distribution. Business Queensland's succession guidance emphasises a documented transition plan, including preparation of successors and roles. 2 Financial comparisons are more useful when they are tied to a workable operating structure rather than an assumed equal division of a single headline total.
Track changes between historical value and implementation
Where administration or planning extends beyond the valuation date, record later distributions, capital injections, asset sales and material trading changes separately. These movements can explain why the amount ultimately transferred differs from a historical assessment. They should not silently be inserted into the earlier valuation as though they were known at that time.
A bridge between the valuation date and the proposed implementation date helps advisers choose whether an updated opinion is required. It also distinguishes changes in business value from decisions about how value was extracted or allocated. The report remains evidence for the identified purpose, not a ruling on executor duties, beneficiary rights, succession fairness or the validity of a proposed family arrangement.
For a private company, our company valuation services explain how operating-business value, company equity and the particular ownership interest fit together.
Scope, fees and timing
See our fixed-fee valuation packages and confirm the scope and fee before commissioning work. Confirm the purpose, intended users, information requirements and inclusions in a written engagement before work begins. Calculated Value and Limited Scope delivery is 5–7 business days from complete financial information and a signed engagement. Full Conclusion timing is confirmed individually in the engagement letter. Specialist requirements or changes to the instruction may affect suitability and timing; confirm these before relying on an external deadline.
Sources and further reading
Frequently asked questions
Does an estate valuation always use the date of death?
The required date depends on the purpose, so ask the executor’s lawyer and tax adviser to confirm it. Estate administration, a later sale and succession planning may need different measurements. A date-of-death assessment should be clearly distinguished from a current planning value rather than using one figure for every decision.
Does every inherited business interest get a market value cost-base reset?
No. The ATO distinguishes assets acquired by the deceased before and after 20 September 1985, with specific exceptions. Many post-CGT assets generally retain the deceased’s relevant cost-base amount. Ask your tax adviser to identify the applicable treatment before assuming a date-of-death business valuation creates a new tax cost base.
Are we valuing estate shares or the company’s underlying business?
Identify the asset actually held by the deceased. Shares in a company are different from direct ownership of its operating assets, and shareholder loans may be separate interests. Ownership registers and agreements help define the instruction so the report does not treat all assets controlled by the family as personally owned estate property.
What evidence can an executor gather for a business valuation?
Useful records include ownership registers, governing agreements, financial statements, management accounts and loan schedules. Supply relevant legal instructions identifying the estate interest and date, without sending unnecessary personal material. If information access or ownership is disputed, obtain legal clarification first rather than asking the valuation to resolve who is entitled to the assets.
How is a business affected by the death of its working owner?
The analysis should consider the owner’s actual role, replacement management costs and whether important relationships, licences or contracts continue. The effect depends on the instructed date and facts. It would be misleading to capitalise the latest profit unchanged if maintaining that profit requires additional staff or a different operating arrangement.
Can a valuation decide how beneficiaries should divide the estate?
No. It can give executors and advisers evidence about specified business interests, but distribution rights and disputes require legal advice. A valuation conclusion is not an instruction to sell, equalise inheritances or transfer shares. Agree how the report will inform discussions without representing it as a settlement of beneficiary entitlements.
Can we compare a family handover with selling to an outside buyer?
Separately scoped planning scenarios can help identify the value implications of different arrangements. State assumptions about management replacement, retained assets and any staged transfer. These are planning comparisons, not guaranteed proceeds. Your advisers still need to examine affordability, tax, legal documents and the successor’s capacity to run the business.
Should we update the succession value while the owner is still working?
Regular reviews can be useful because business value and the owner’s circumstances may change before a handover. The appropriate interval depends on purpose and material developments, not a universal expiry period. Revisit the evidence after significant changes in earnings, debt, ownership rights or the intended successor’s operational role.
Will an estate valuation automatically satisfy probate or court requirements?
No acceptance can be promised. Ask the estate solicitor to specify the jurisdiction, required date, report purpose and any evidence rules before engagement. A planning report may not be suitable for contested proceedings. Additional instructions or expert evidence requirements should be addressed expressly rather than assumed from the fact that the report is signed.
How should an executor request a fee and delivery date?
Identify the instructing authority, estate interest, required date, intended users and available records. The Fixed Professional Fee is agreed upfront. Standard delivery is 5–7 business days after complete records and a signed engagement. Historical evidence gaps or separate specialist assets should be discussed before external deadlines are set. This 5–7 business-day timetable applies to Calculated Value and Limited Scope only; Full Conclusion delivery is confirmed individually in the engagement letter.
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WHAT YOU GET IN A LIMITED SCOPE VALUATION REPORT
Inside your IBV™ report
Executive Summary
Conclusion of value · Method selected · Valuer qualifications
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Maintainable earnings · Cap rate / multiple · Premise of value
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SWOT analysis · Top Performers Report · RAVDA score
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