Key takeaways
Map each legal step before valuing the restructure
Moving property, transferring business assets and inserting a holding company do not transfer the same economic package, even within one group. Prepare a step diagram showing owners, assets, consideration and continuing access arrangements so each valuation matches the proposed sequence rather than a mixture of alternatives.
Check the business can sustain earnings after separation
A separated business may need to replace shared staff, software, premises or branding that previously carried little visible cost in its accounts. Document the required services, contracts and permissions, and adjust earnings for realistic continuing costs rather than assuming the old group profit survives unchanged.
Keep commercial valuations separate from rollover tax calculations
A business restructure valuation can help explain the assets exchanged, but does not establish rollover eligibility or the receiving entity’s tax cost. Maintain separate accounting, market value and adviser-calculated tax figures, and ask your adviser to assess the particular regime rather than borrowing another concession’s threshold.
Trace funding and ownership rights through every restructure step
Restructures often exchange assets for shares, loan balances or assumed debts rather than cash, so matching accounting entries alone may hide changes in value. Prepare before-and-after balance sheets and review share rights, repayment obligations and dilution to show what each entity and owner actually receives.
Document business reasons and distinguish proposals from completed facts
The commercial rationale and continuing business activity matter to advisers assessing a proposed restructure, while official examples are not blanket approvals. Keep contemporaneous board records and clearly identify assumptions, because a valuation of proposed arrangements cannot establish tax relief or describe a materially different completed transaction.
Describe the proposed steps
Moving a business into a new structure changes more than the name on the accounts. Assets may move, owners may exchange interests, and continuing operations may depend on new leases or service agreements. Ask your accountant and solicitor to map the proposed steps, their sequence and relevant dates. Value the interests specified in that map rather than combining before-and-after assumptions into a single undefined restructure figure.
Assemble a transaction map
Useful evidence includes current and proposed structure charts, transaction documents, accounts and intercompany balances. Identify assets retained outside the operating entity and services provided by related parties. Where arrangements are still being negotiated, distinguish settled facts from assumptions so a later change in the transaction can be assessed against the original valuation brief.
Keep assumptions consistent across interests
Related entities may share customers, staff, premises or intellectual property. Valuation analysis needs to understand where earnings arise and which entity bears the associated costs and risks. Internal charges may need examination, while common ownership does not justify counting the same income stream or asset in more than one place in the valuation schedule.
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.
Provide a traceable set of values
The proposed report explains the subject interests, valuation dates and methods, with supporting schedules for the agreed steps. It should make debt, surplus assets and dependencies visible. Advisers can then connect each valuation conclusion to the relevant transaction document, rather than relying on a group-wide headline figure that may not answer the specific transfer question.
Do not infer tax relief
A restructure valuation does not establish rollover eligibility, a new cost base or exemption from duty. Your advisers must determine the legal and tax consequences. For more specialised instructions, consider CGT rollover support or entity consolidation valuation, with scope confirmed against the actual proposed arrangements.
Model the business before and after each legal step
A restructure can separate trading risk from property ownership, move intellectual property or insert a holding company. These changes do not all transfer the same economic package. Start with a step diagram identifying the legal asset moved, the owner before and after, the consideration and any continuing access arrangements. A group value alone cannot show what each entity gives up or receives.
Build the valuation model around the actual implementation sequence. If property moves first and is then leased back, the trading entity's earnings after that step should reflect the new occupancy terms. If the documents instead transfer shares in the property-owning company, the subject and debt treatment change. Treat alternative structures as distinct scenarios rather than quietly mixing their assumptions.
Test whether earnings survive the separation
A division relying on shared staff, software, branding and customer contracts may look profitable only because central costs were never allocated. Identify the resources it needs after separation and who will provide them. Obtain service agreements, licence terms and realistic replacement costs rather than applying the old group margin without adjustment.
Normalisation must work in both directions. Removing an excessive management charge can be reasonable, but removing the charge entirely while retaining the management service overstates earnings. Customer consents, change-of-control clauses and non-transferable permits can also constrain what moves. Record whether the valuation assumes consent, continued support or new contracts, and explain the effect if those conditions are not achieved.
Distinguish commercial value from rollover tax amounts
The ATO's small business restructure rollover guidance describes conditions including eligible entities, a genuine restructure of an ongoing business and preservation of ultimate economic ownership. It refers to an aggregated turnover threshold below $10 million for that regime. This is not the same as the $6 million MNAV pathway used for certain small business CGT concessions.
A valuation may help advisers understand assets and exchanges without determining whether the rollover is available. Nor does market value necessarily become the receiving entity's tax cost. Maintain separate columns for book carrying amount, instructed market value and adviser-calculated tax amount. This makes it harder for an implementation team to copy a commercial number into a tax register without checking the applicable provision.
Reconcile funding and consideration across the structure
Restructures often use share issues, loan accounts, debt assumptions or distributions instead of cash. Trace both sides of each entry to legal documents. A receivable in one entity should correspond to a recognised obligation elsewhere, unless the adviser identifies a valid difference. Proposed forgiveness or capitalisation is a separate step, not an automatic valuation adjustment.
Prepare pre-step and post-step balance sheets showing ownership, funding and cash requirements. If shares are issued in return for assets, identify the class, voting rights, distribution entitlements and dilution of existing holders. Equal nominal share numbers do not necessarily preserve equal economic rights. Record any value transfer arising from different rights or obligations rather than assuming the restructure is neutral because the family remains involved.
Preserve the business rationale and unresolved dependencies
ATO ruling LCR 2016/3 distinguishes genuine restructures from arrangements directed toward disposal, succession or extracting wealth in the circumstances it considers. Its examples are fact-specific, not approval templates. Retain board papers and contemporaneous records explaining operational reasons, expected efficiencies and continuing business activity. The legal and tax advisers must assess how the ruling applies.
The valuation report should distinguish implemented facts, proposed agreements and unsupported management intentions. If the restructure changes the resources available to an entity, revisit the relevant cash flows and risk assessment. A conditional valuation of an envisaged structure cannot establish the value of a materially different completed arrangement. Duty relief, creditor issues, anti-avoidance provisions and rollover elections remain outside the valuation conclusion.
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
We are moving from a sole trader to a company. What needs valuing?
Ask your accountant and solicitor to identify the assets and interests being transferred, retained or newly issued. Goodwill, equipment, loans and ownership interests may raise different questions. We then scope the required subjects and dates rather than assume one headline business value answers every legal and tax step in the restructure.
Do we still need valuation evidence if our accountant expects rollover relief?
Ask your accountant what evidence is required for the particular rollover and transaction steps. Relief is conditional, and a valuation does not establish eligibility. The ATO’s small business restructure rollover includes requirements concerning a genuine restructure and ultimate economic ownership; other taxes and record-keeping questions still need separate adviser consideration.
Can one report cover several transfers within our group?
Potentially, if the entities, assets, interests and effective dates are clearly mapped before engagement. Provide current and proposed structures and a transaction schedule. We can then identify consistent assumptions and separate conclusions for the agreed steps, while avoiding double counting intercompany balances or the same business income in multiple entities.
Which date should be used when the restructure happens in stages?
Your advisers should confirm the legally relevant date for each step rather than default to the year-end accounts date. We need the sequence, planned agreements and any changes between steps. Multiple dates may require additional evidence or separate conclusions, particularly if performance, ownership rights or liabilities change during implementation.
Our IP is held in a separate company. How does that affect the restructure values?
Provide ownership and licence documents, intercompany charges and details of how the operating business uses the intellectual property. The analysis needs to understand which entity earns the benefits and bears costs. Your lawyer should confirm the rights transferred; the valuation should not count the same income both as operating goodwill and standalone IP.
Can you compare the values before and after our proposed restructure?
A before-and-after assessment can be scoped, but the proposed transactions and assumptions must be sufficiently defined. We identify which interests change and reconcile the effects of debt, asset transfers or new rights. Such analysis does not establish that the restructure is tax effective or that ownership changes satisfy a particular rollover.
What do you need to see about intercompany loans?
Provide reconciled balances, loan agreements, repayment terms and details of any proposed forgiveness, assignment or capitalisation. Their treatment can change entity equity values and the interests being transferred. Your accountant should confirm the transaction accounting and tax analysis, while the valuation makes clear which balances are included, excluded or assumed to continue.
Will a rollover mean there is no stamp duty on the restructure?
Not necessarily. Income tax rollover treatment and state duty are separate questions. Your solicitor or tax adviser must assess duty under the relevant jurisdiction and transaction rules. For example, Queensland business asset rules can include goodwill; the valuation report does not itself grant duty relief or establish that an exemption applies.
Source: Queensland Revenue Office — Assessing if business asset transfers are dutiable
We changed the transaction after the draft valuation. Can we still use it?
Tell us exactly what changed before relying on the report. Different assets, ownership rights, financing or dates may alter the valuation subject or assumptions. We can assess whether a revision or new instruction is needed. Your advisers should check that each final transaction document corresponds to the interest actually valued.
When should we commission the valuation in the restructure timetable?
Engage once your advisers can describe the steps, purposes and relevant dates, and before the values are needed for implementation. We agree a Fixed Professional Fee upfront. Standard delivery is 5–7 business days after complete records and a signed engagement; confirm timing before setting transaction deadlines. This 5–7 business-day timetable applies to Calculated Value and Limited Scope only; Full Conclusion delivery is confirmed individually in the engagement letter.
A clear, independent view of value — with the evidence behind it.
- Understand the conclusion — and what drives value.
- Gain an independent perspective. Move forward with confidence.
- Benchmark your business against industry performance.
- Identify strengths, risks and opportunities through SWOT analysis.
WHAT YOU GET IN A LIMITED SCOPE VALUATION REPORT
Inside your IBV™ report
Executive Summary
Conclusion of value · Method selected · Valuer qualifications
Detailed Report
Maintainable earnings · Cap rate / multiple · Premise of value
The Evidence Pack
SWOT analysis · Top Performers Report · RAVDA score
APES 225 voluntarily aligned. Report depth and supporting analysis follow your agreed package and engagement scope.
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