A New Date That Could Matter for Every Business Owner
Much of the discussion around the Federal Budget’s proposed capital gains tax reforms has focused on how gains will be taxed in the future. However, an equally important question may be: what is your asset worth on 1 July 2027?
If the proposed reforms proceed, many taxpayers may need to establish a market value for assets held at the commencement date to determine how future gains are calculated under the new rules.
For business owners, that raises an important practical issue. How do you prove what your business was worth on 1 July 2027 if you don’t obtain a valuation at the time?
Why Valuations Could Become More Important
Under the current CGT regime, many taxpayers simply track the original cost of an asset and apply the relevant tax concessions when it is eventually sold.
The proposed reforms may create a need to distinguish between gains that accrued before and after the commencement date. If that occurs, establishing a reliable market value at 1 July 2027 could become critical.
For business owners, shareholders and investors, that may mean obtaining independent valuations of:
- private companies;
- business assets;
- family investment entities;
- trusts holding active businesses;
- goodwill and intangible assets; and
- certain commercial property interests.
In many cases, a valuation prepared years later may be difficult, costly or open to challenge.
The “I’ll Do It Later” Problem
History shows that taxpayers often underestimate how difficult retrospective valuations can be.
A business owner who sells a company in 2032 may suddenly need to demonstrate what that business was worth five years earlier on 1 July 2027.
By then:
- financial records may be incomplete;
- key management personnel may have left;
- market conditions may have changed dramatically;
- supporting documentation may no longer exist; and
- memories of important events may have faded.
Obtaining a contemporaneous valuation while the information is readily available is often far easier than attempting to recreate history years later. And, importantly, the use of hindsight is not generally allowed in retrospective valuations, and this might create potential disputes with the ATO!
Private Businesses Face the Biggest Challenge
Listed shares and publicly traded investments generally have readily available market values.
Private businesses are a different story.
Many Australian SMEs have never been formally valued. Owners often have a general idea of what the business is worth, but little documentary evidence to support that view.
For businesses with significant goodwill, intellectual property, customer relationships or recurring revenue streams, determining market value can be complex.
A professional valuation provides an independent assessment that can be retained and relied upon if questions arise in the future.
Who Should Consider a Valuation?
While every situation is different, business owners may wish to consider obtaining advice if they own:
- shares in a private company;
- interests in a family trust carrying on business;
- professional practices;
- medical, legal or accounting firms;
- manufacturing or distribution businesses;
- technology companies; or
- businesses with substantial goodwill.
The larger the potential future capital gain, the greater the importance of establishing an accurate starting value.
Don’t Wait Until the Last Minute
If the proposed reforms become law, demand for valuation services is likely to increase significantly as the commencement date approaches.
Business owners who wait until the final months before 1 July 2027 may face:
- longer turnaround times;
- higher valuation costs; and
- limited access to experienced valuers.
Early planning allows sufficient time to gather information, review assumptions and ensure the valuation appropriately reflects the business.
Key Takeaway
The proposed CGT reforms may ultimately make 1 July 2027 one of the most important valuation dates in recent Australian tax history.
While the legislation is not yet finalised, business owners should start considering whether they may need evidence of the market value of their business or other assets at that date.
For many taxpayers, the question in years to come may not simply be how much tax is payable on a capital gain—but whether they can prove what the asset was worth when the new rules began.
A valuation obtained at the right time could become one of the most valuable documents a business owner keeps on file.
If you have a business or assets, you need to consider getting a valuation done around June 2027 – contact us for a no-obligation discussion.
Disclaimer: The measures discussed are proposed legislation announced in the 2026–27 Federal Budget and are not yet law. Professional advice should be obtained before implementing any restructuring or liquidation strategy.
