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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Moving a business, a property or a parcel of shares between companies and trusts you already control still has tax consequences measured at market value, whatever the paperwork says. We fix that value before the steps are signed, so each rollover test and each Revenue NSW duty question rests on a figure you can defend years later.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A restructure valuation sets the market value, at the date of transfer, of every business, asset or interest passing between related entities. Federal rollover tests, Division 7A and New South Wales duty all trace back to that number, and a report prepared at the time protects the group when it is sold, reviewed or divided.
Inside a family group a restructure seldom feels like a deal. One set of people signs for both sides, frequently no cash moves, and the accountant who keeps the books drafts the paperwork. Nobody is negotiating, so nobody tests the price, and the figure that lands in the transfer document is usually book value or whatever number was convenient.
Tax and duty rules assume the opposite. A transfer between related parties is generally treated for capital gains purposes as happening at market value, regardless of the contract, and the rollovers that defer the gain turn on conditions framed in market value. In New South Wales, Revenue NSW administers duty under the Duties Act 1997 (NSW), which reaches transfers of land and also acquisitions of interests in companies and unit trusts that hold land (landholder duty), and the dutiable value is not simply the figure the parties choose to record. Division 7A raises the question once more whenever a private company moves value to a shareholder or an associate. A book figure answers none of these.
Leaving the valuation out postpones the cost without removing it. A restructure built on an assumed number tends to stay silent until a sale, a family split, a bank review of its security or an ATO enquiry. By then the steps are complete, and someone must reconstruct market value on the day from whatever records have survived.
We value restructures for Illawarra groups of every size. An engineering firm in the Port Kembla steel supply chain lifting its Unanderra workshop out of the trading company. A Kiama hospitality group placing a holding company over its venues. A Dapto electrical contractor stepping up from sole trader to a company. A university spin-out near Wollongong adding a holding entity ahead of a capital raise. Your accountant, tax adviser and lawyer design the steps and choose the rollover or exemption; we supply the values each step relies on, and we stand behind them.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Choosing the rollover and claiming any duty relief is a matter for your advisers. Our contribution is the value each of those choices is measured against, and these four regimes are where it is needed.
When a private company hands an asset to a shareholder or associate for less than it is worth, or lends money through the group without a complying loan agreement, a deemed dividend can follow. Restructures produce both situations easily, often by accident. Only a market value shows whether the price was too low and by how much.
Inserting a holding company, exchanging shares or units, or rolling a sole trader's business into a company normally requires each owner to finish with the same share of market value they started with. Some other rollovers set what a party receives against what it surrenders. If share classes, loan accounts or holdings are uneven, both sides of that weighing must be valued.
Revenue NSW administers duty under the Duties Act 1997 (NSW). Transfers of New South Wales land can attract transfer duty, and acquiring an interest in a company or unit trust that owns land can raise landholder duty, with the assessment looking to value instead of simply the price the related parties record. Whether any exemption or concession fits your steps is for your lawyer to confirm. Revenue NSW may also ask for its own evidence of land value.
Active assets can pass from a small business entity to another entity in a genuine restructure with no gain realised, so long as ultimate economic ownership is unchanged. Where the form of the holdings changes, that condition has to be demonstrated in value terms, and a valuation made at the time also supports the case that the restructure had a real commercial purpose.
Others rely on the numbers too. A minority holder whose percentage must be preserved, trust beneficiaries whose assets move, a bank whose security shifts to a new entity, a landlord asked to consent to a lease assignment and an employee holding options all depend on them. Assignment of a retail lease to the new entity is governed by the lease and, for retail premises, the Retail Leases Act 1994 (NSW), and the NSW Small Business Commissioner can assist with mediation if landlord and tenant cannot agree. An independent value shows that no one surrendered value along the way.
A new holding company above a trading company or trust. A business, a division, freehold premises or intellectual property moved between entities. A family trust varied, divided or vested. A group split among siblings, or along its lines of business. A new shareholder admitted or a retiring one bought out. Dormant companies and cross-holdings cleared away. Workshop or warehouse premises separated from the operating company well ahead of a sale.
Each step is valued at market value on the day it takes effect. A whole business passing between entities is valued as a business; a parcel of shares or units is valued with its rights, restrictions and voting position; an asset moving by itself is valued on its own, and in a restructure that asset is often one nobody has priced, such as a trading name, a client base, a software platform or the benefit of a lease.
For a trading business the income approach leads: maintainable earnings, normalised for owner salaries, related-party rent and fees and one-off items, capitalised at a rate that reflects the risk. Assets missing from the balance sheet are valued as a purchase price allocation would value them, using relief from royalty for brands and technology, multi-period excess earnings for customer relationships and contracts, and replacement cost for software built in house. Transferring one of these at nil when it plainly has value can trigger CGT, duty and Division 7A consequences in a single step.
The asset approach carries more weight here than on a sale, since many Illawarra restructures exist to hold freehold premises and surplus assets outside the trading company, whether that is a fabrication shed at Unanderra, a workshop in the Port Kembla industrial area or a consulting suite in North Wollongong. Land is valued on comparable sales and, where Revenue NSW needs it, by a registered property valuer working with us. The market approach then cross-checks the business value against sale transactions, so the figure used inside the group is one an outside buyer would accept.
Almost none of this is visible on the day. It emerges on a sale, when a shareholder leaves, or in an ATO or Revenue NSW review, by which point the steps cannot be undone.
A restructure value may be relied on by the ATO, Revenue NSW and any later buyer or lender, so most owners choose a certified report. The Indicative report is useful earlier, while owners are still deciding whether a restructure is worth doing and what tax and duty it might trigger.
The report lists every asset and interest that moves, the valuation date, the standard and premise of value and the documents relied on, then gives the method and inputs for each. Each intangible gets its own valuation, with its assumptions stated. Where a rollover turns on proportions, the interests before and after are shown on a single basis so the test can be read directly from the page, and land is reported on its own so the figure Revenue NSW may want sits apart from the tax figure.
The people who examine a restructure later were not in the room when it was designed: a buyer's due diligence team, a lawyer acting for a relative who has left, an ATO officer, a Revenue NSW assessor or, if owners fall out, a court. Depending on the claim, that could be the District Court sitting at the Wollongong courthouse or the Supreme Court of New South Wales in Sydney, and an expert report in either must follow the Expert Witness Code of Conduct in the court rules. We write for that reader. A certified valuer signs the report, works through it with your tax adviser and lawyer while the steps are settled, and defends it if challenged. Timing counts: a valuation completed before execution can still reshape the steps, whereas one done afterwards can only record them.
Which condition does this step test in market value terms, what is that value on the signing date, and which document proves it? Until each has an answer, the step is not ready to sign.
Talk your situation through with a certified valuer before you commit to anything, at no cost.