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Moving a business, a property or a shareholding between entities you already control is still a transaction. The tax law, the duty law and any later buyer will price it at market value, so the value has to be established before the step is taken.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A restructure valuation establishes the market value of the business, assets or interests moving between related entities on the date of the restructure. That figure is what the CGT rollover conditions, Division 7A, the small business restructure rollover and Revenue NSW duty are all tested against, and it is the evidence that protects the position when the group is later sold or reviewed.
Nothing is sold in an internal restructure. The same people own the same assets before and after, no money needs to change hands, and the group's overall position looks unchanged. That is exactly why the valuation step gets skipped, and why the problems it would have prevented surface years later.
Each step in a restructure is a disposal for capital gains tax, assessed at market value because the parties are related. The rollovers that defer the tax carry conditions, and several of those conditions are measured in value terms. Revenue NSW assesses duty on land and landholder interests at market value and does not simply adopt the group's figure. If a private company is one of the entities, taking value out of it for less than market consideration brings Division 7A into play. Every one of those tests needs a number, and none of them accepts book value.
The exposure is deferred, not avoided. A restructure completed on an assumed value looks fine until the group is sold, a shareholder exits, the ATO reviews the position or a beneficiary asks what happened. By then the step cannot be undone, and the market value at the time has to be pieced together from records that may no longer exist.
We provide the market value evidence for restructures across Sydney, from a sole trader in Penrith moving into a company, to a family group in Norwest separating property from trading risk, to a Macquarie Park technology business tidying its structure ahead of a capital raise. Your tax adviser and lawyer design the restructure. We make sure the values it rests on will hold.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Which rollover is available, and which duty concession applies, is a question for your advisers. What follows is where each of them needs a market value, because that is the part the valuer is responsible for.
The rollovers used to interpose a holding company, exchange shares or move a business into a company generally require ownership interests to be maintained in the same proportions, measured by market value, or require what each party receives to bear a specified relationship to what it gave up. Where shareholdings or share classes differ, that proportion test cannot be satisfied without valuing the interests on both sides.
Subdivision 328-G allows a small business entity to move active assets between entities as part of a genuine restructure without triggering the gain, provided the ultimate economic ownership of the assets is unchanged. Where the interests are not identical before and after, showing that economic ownership has been maintained is done in value terms, and the genuine restructure requirement is easier to evidence with a contemporaneous valuation on file.
Where an asset leaves a private company for less than market value, or a loan between group entities is never put on complying terms, the shortfall can be treated as a deemed dividend to the shareholder or their associate. Internal restructures create this exposure readily, and the market valuation is what shows whether a shortfall exists.
Transfer duty applies to NSW land at market value where the parties are related, and landholder duty can apply when a significant interest in a company or unit trust holding NSW land changes hands. Revenue NSW administers a corporate reconstruction concession for transfers within a corporate group, subject to conditions that include association periods before and after the transaction, and it has to be applied for rather than assumed. The revenue office may require its own valuation evidence for land.
The people affected by a restructure extend beyond the ATO. Minority shareholders whose proportion must be preserved, beneficiaries of a trust whose assets are being moved, lenders whose security is shifting between entities, joint venture partners with consent rights and employees holding equity all have an interest in the values used. An independent valuation is what shows the restructure was not done at their expense.
Interposing a holding company above a trading entity. Moving a business, a division, real property or intellectual property between group entities. Varying, splitting or vesting a family trust. Demerging a group between family branches or business lines. Admitting a new shareholder or buying out a departing one. Rationalising an inherited structure with dormant entities and circular holdings. Separating the assets a buyer wants from the ones they do not, well before a sale.
The standard is market value at the restructure date. Where the whole business moves, that is a business valuation in the ordinary way. Where a parcel of shares or units moves, the interest is valued with its rights and restrictions. Where a single asset moves, the asset is valued on its own, which is where restructures raise a problem most owners have never faced: the assets being moved are often the ones that have never had a value put on them.
For a trading business the income approach leads, capitalising future maintainable earnings after the usual normalisation of owner remuneration, related-party charges and one-off items. For assets that have never appeared on a balance sheet, the valuer borrows the toolkit from acquisition accounting: a royalty-relief calculation for a brand or technology, the multi-period excess earnings method for customer relationships and contracts, and replacement cost for software developed in house. A brand or customer base transferred at nil book value when it is plainly worth something creates exposure under the CGT, duty and Division 7A rules at once.
The asset approach carries more weight in a restructure than in a sale, because the exercise is often about separating property and other assets from trading risk. Land is valued by reference to comparable sales and, where Revenue NSW requires it, by a registered property valuer. The market approach cross-checks the business value against comparable transactions so the figure used internally is one an outside buyer would recognise.
Most of these only come to light on a later sale, an exit or an ATO review, when the restructure can no longer be unwound.
Most restructures need a certified report, because the value will be relied on by the ATO, Revenue NSW and anyone who later examines the group. An internal figure is still useful early, when the family or the board is deciding whether to restructure at all.
The report identifies every asset and interest being moved, states the valuation date, the standard and premise of value and the information relied on, and sets out the method applied to each asset with the inputs sourced. Intangibles are valued individually with the method and the assumptions shown. Where a rollover proportion test applies, the report presents the interests on both sides of the transaction on the same basis so the test can be read directly from it. Land and business values are reported separately for their different audiences.
A restructure gets looked at when the group is sold, when a member exits or when the ATO or Revenue NSW asks. The report is written to be read years later by someone who was not involved, and it is signed by a certified valuer who will explain it to your tax adviser and lawyer while the restructure is being designed, and defend it if it is challenged. Engage us before execution: a valuation obtained afterwards records the position, while one obtained beforehand can still change it.
Which condition of this rollover or concession is measured in value, and do we have a market value that satisfies it as at the date we are about to sign? If nobody can point to the figure, the step is not ready.
Talk your situation through with a certified valuer before you commit to anything, at no cost.