Who can value a business for tax purposes?

There is no admissions board for business valuers

Some valuers do need a licence. In some states, real property valuers must be registered or licensed, and the GST margin scheme has its own valuer rules. For business valuation, the ATO’s own guide says there is no formal admissions board in Australia.

Instead, the guide says a valuation’s acceptability for tax purposes usually depends on the process followed, rather than who carried it out. Valuation institutes and the accounting bodies set standards for business valuers, and the ATO generally treats a report by a suitably qualified professional, following accepted standards, as more reliable.

So the useful question is not “who is allowed?” but “will this valuation hold up if reviewed?” The same principles generally apply to a market value as at 30 June 2027 for the CGT changes, where a valuation is only one option.

What the ATO looks for

The ATO’s guide leaves the onus with you, even when you hire a professional. You are expected to make sure the valuer:

• has the knowledge and experience for this kind of business and interest
• is properly instructed, in writing, with the purpose, scope and valuation date
• stays objective, with a fee that does not depend on the answer
• gets access to the records and people they need
• reaches a value supported by credible evidence and a recognised method

The report should state the purpose and scope, the exact interest valued, the valuation date, the information relied on, the method and why it was chosen, the valuer’s identity and qualifications, and a declaration of independence. The test: could another valuer follow the working?

It matters for penalties too. The ATO says that, generally, if you engage and properly instruct a professional valuer and give them correct information, you will not be liable for penalties if the valuation is later found deficient.

Questions to ask before you engage a valuer

1. Do you value private businesses like mine, and the specific interest (shares, trust units or a partnership interest)?
2. Is your fee set before you start, and independent of the value you reach?
3. Do you have any relationship with me, the business or the other owners?
4. Will you confirm in writing whether this is a full valuation or a limited-scope calculation?
5. Will the report show the method, adjustments, a cross-check and the evidence, as at the right date?
6. Who signs the report, and with what qualifications and experience?

Can your accountant do it? The ATO says acceptability usually depends on the process, not who did it, and that it is prudent to check the valuer has experience with the asset class. Some prefer to refer it out, so the value comes from someone independent of the person preparing the return. Where an expert is not independent, the ATO expects that to be disclosed and explained. Either can work if the process holds up.

How we work

Independent Business Valuation values businesses and business interests, nothing else. Each report is prepared by a suitably qualified business valuer at Valuation Group, who makes every valuation judgement and signs the report.

We are independent of your accountant and work alongside them. A full valuation report on one business or ownership interest is a fixed $999 + GST, and does not move with the value we reach. The fixed fee applies once we confirm the interest, purpose, structure and records fit the fixed-fee scope. Anything outside it is quoted in writing before we start.

We do not give tax advice. Whether you need a valuation, or can use an apportioning method once it is finalised, is for your tax adviser.