Preparing your records for a 30 June 2027 valuation

Why records made at the time win

From 1 July 2027 the CGT rules change for individuals, trusts and partnerships. Australian resident individuals and trusts with at least one eligible beneficiary are generally treated as having sold and bought back relevant assets just before 1 July 2027 at market value. A government apportioning method, still a draft, may be chosen instead once it is finalised. A company's own post-CGT assets are outside that rule (pre-CGT assets have their own reset). Your tax adviser decides whether it touches you.

If market value is the route, the number will be judged on its evidence. The ATO's market valuation guide says a valuation should use information known or reasonably foreseeable at the valuation date. Among the problems it commonly sees: leaving out information available at the date, and relying on later events nobody could have foreseen.

Timing matters because the choice between market value and apportionment is generally made with the tax return for the year you sell, perhaps in 2045. A budget or customer report saved in mid 2027 shows what was known. A spreadsheet rebuilt in 2045 shows what someone now believes was known, and a reviewer can tell the difference.

Who owns what at 30 June 2027

First, a valuer needs to know exactly what is being valued: the whole business, all the shares, some units or a partnership share. That turns on documents that often sit in a drawer at a law firm.

• Company extracts and a simple chart of which entity owns what
• Share, unit and partnership registers as they stand on 30 June 2027
• The trust deed, every variation, and current trustee and appointor details
• Shareholder, unit holder and partnership agreements, especially transfer restrictions, pre-emptive rights and exit price formulas
• Resolutions for any share issues, transfers or buy-backs during the year

These terms can move value, because a buyer of that interest would weigh them. Unsigned drafts are a common gap: if the agreement everyone follows was never signed, fix it with your lawyer now, dated the day it is signed.

Accounts, management reports and tax returns

The financial record is the spine of the valuation. Aim for a clean run of at least three years ending 30 June 2027.

• Financial statements for each entity for three to five years to 30 June 2027
• Income tax returns for the same years, with the main workpapers
• Monthly management accounts for the 2027 financial year, including June, reconciled to the year-end figures
• A stocktake counted on or close to 30 June 2027, not estimated
• Aged debtors, creditors and work in progress at 30 June 2027
• The 2028 budget or forecast, saved as first written

If you balance on another date, such as 31 December, the valuation date generally stays at 30 June 2027. Ask your accountant now for a proper 30 June 2027 cut-off, with accruals and a stock count. Rebuilding a mid-year balance sheet years later is slow and easy to argue with.

Owner pay, related parties and one-off events

A buyer pays for the earnings they would actually receive. Private business profits rarely show that cleanly, so the valuer adjusts them, and each adjustment needs evidence.

Employee and owner remuneration

• A staff list at 30 June 2027 with roles, start dates, pay and super
• What each owner and family member was paid, by wages, super, drawings or distributions, and the work they did
• Rent, fees or other payments to related parties, with the agreements behind them

Unusual events in the 2027 financial year

In July or August 2027, while memory is fresh, write a short note on anything that pushed the year off its normal path: a large one-off job, an insurance payout, a forced closure, a lost customer, a key person leaving. Give the amount, the month and where the evidence sits.

Leases, contracts and customers

Next, how secure are those earnings? A buyer pays less for revenue that can walk out the door.

• The premises lease: term and options left at 30 June 2027, rent reviews, make-good, and assignment or change of control terms
• Key customer and supplier contracts, franchise agreements and licences, with end dates and termination clauses
• Tenders, quotes and contracts on foot at the date
• Revenue by customer for each of the last three years, with the top ten clearly identified

Customer data is the record owners most often wish they had kept. If one customer is 35 per cent of revenue on 30 June 2027 and leaves in 2029, a valuer looking back must show the concentration at the date, not what came next. Export it as a dated file in July 2027.

Assets, debt and related-party loans

These records turn the value of the business into the value of the shares, units or partnership interest being valued.

• A fixed asset register at 30 June 2027, flagging anything idle, surplus, or owned personally but used in the business
• Bank loans, equipment finance and overdrafts, with statements showing balances at the date
• Loans between the business and its owners, family or related entities, with any loan agreements and the 30 June 2027 balance
• Security given to lenders or for other parties' debts, and any known claims or disputes

A loan the company owes its owner usually reduces the value of the shares, while a loan the owner owes the company can add to it. If a balance exists only as a journal entry, ask your accountant to confirm it in the year-end accounts.

A simple timeline from now to after the date

1. 01NowAsk your tax adviser whether the 30 June 2027 rules may affect you. Gather the ownership documents and fix gaps, dated when actually done.
2. 02Through the 2027 financial yearClose the management accounts monthly, save budgets as you write them, and note unusual events as they happen.
3. 03Around 30 June 2027Count stock, export registers and customer reports as dated files, and record bank and loan balances.
4. 04July to October 2027Write the unusual events note, finalise the accounts, and keep everything in one read-only folder.

How long to keep the file

The CGT record-keeping rules generally require records that can reasonably be expected to help work out a capital gain or loss, including from a CGT event that has not happened yet. The ATO says records for CGT assets generally need to be kept while you own the asset and for 5 years after you sell or dispose of it.

Sell in 2040 relying on a 30 June 2027 value, and the valuation and its records may need to survive until 2045 or later. Keep a copy outside your accounting software. Your tax adviser can confirm what applies to you.

How we can help

Independent Business Valuation values businesses and business interests. We do not give tax advice. A valuation as at 30 June 2027 is prepared after that date, once your records to 30 June 2027 are available. You can book your place now. When you book, we send a records list for your structure and flag gaps while they can still be closed. Documents come only through the secure upload link on your matter, never by email.

We charge one fixed fee of $999 + GST for a full valuation report on one business or ownership interest with annual turnover under $10 million. Delivery is 2 business days for turnover under $2 million and 3 business days for turnover $2 million to $10 million. Delivery time starts once payment and all required information have been received, and pauses while we wait for answers to our questions or your signed representation letter. 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. Fixed fee, confirmed in writing before we start. No hourly billing and no surprises.