How a 30 June 2027 business valuation works

What gets valued

A valuation is always of something specific. It might be the whole business, your shares in the company that owns it, units in a unit trust, or your share of a partnership. Which one matters, because they are not always worth the same thing.

A 30% parcel of shares, for example, does not always carry 30% of the company’s value. Whether it gives control, and what the shareholders agreement says, can change the answer. That is why the first question we ask is what exactly your accountant needs valued.

The date, and why it is strict

The new rules use the value just before 1 July 2027, which in practice means the end of 30 June 2027. A valuation at that date can only use what was known, or could reasonably have been foreseen, at that date.

That rule cuts both ways. Good news that arrives in August 2027 cannot lift the value, and bad news cannot lower it. It is also why records from the time matter so much: they show what was known when it was known.

A valuation done today is a valuation at today’s date. On its own it is not a 30 June 2027 valuation. If the 30 June 2027 value matters to you, it needs to be valued at that date, which is what an update does.

How the number is worked out

For most established, profitable private businesses, the valuer starts with earnings:

• The profit is adjusted to what a new owner could expect: the owner’s wage set at a market rate, private and one-off expenses taken out.
• The adjusted earnings are tested for how reliable they are: customer concentration, owner dependence, the lease, staff, contracts and trends.
• A capitalisation rate or multiple is chosen from that risk and from market evidence about what similar businesses sell for.
• Surplus assets and debts are added or taken off to reach the value of the interest being valued.

A business that holds mostly assets, or makes little profit, may be valued on its net assets instead. A start-up may be valued on recent funding rounds or other evidence. The method follows the business, not the other way around.

An independent valuation is not built to reach a high number or a low one. It should arrive at the most supportable market value on the evidence.

What you will be asked for

Financial statements and tax returns, management accounts to the valuation date, a list of assets and debts, and the commercial story behind the numbers: major customers, contracts, staff, forecasts and known risks.

We have put the full list in one place: the 30 June 2027 valuation checklist. Nothing is needed to make an enquiry. If you engage us, documents come through a private link on your matter, never by email.

When it can be done

There are two ways to arrive at a 30 June 2027 value:

• Value the business now, keep the model and the evidence on file, and update the valuation to 30 June 2027 once the year-end figures exist. This is how our CGT 2027 Valuation Package works.
• Wait, and have the business valued after the date as at 30 June 2027. That is possible, but it is harder to support if the records from the time were not kept.

Either way, the final report is usually completed after 30 June 2027, because reliable year-end accounts take time.

What it costs

If you need it, the CGT 2027 Valuation Package is $1,995 + GST for an established business with annual turnover under $2 million. It covers a valuation now and an update to 30 June 2027 at no additional professional fee. For a business with annual turnover of $2 million or more, or a start-up, the same package is available at a fixed fee confirmed in writing on the first call.

For the valuation now: draft report in 2 business days for an established business under $2 million turnover. Delivery time starts once payment and all required information have been received. No delivery time is promised for the update. See the package.

What a valuation does not do

It does not decide whether the new rules apply to you, which method you should use, or how much tax you pay. Those are questions for your accountant or tax adviser. A valuation answers one question: what was the interest worth at the date, on the evidence.