CGT Changes: Will you be ready to establish your Business Value on 1 July 2027?

Capital Gains Tax (CGT) reforms are now law

If you own an interest in a business, CGT changes introduce an important date that many business owners may not yet have considered: 1 July 2027.

Background

• The Government confirmed the reforms in the 2026–27 Federal Budget, and the legislation has now been passed, with the new rules applying from 1 July 2027

• Taking action now provides an opportunity to document the business circumstances and value drivers while they are current, rather than trying to reconstruct them after the date

• A review closer to 1 July 2027 can then capture any material changes.

While you may have no intention of selling your business for many years, the new rules may require the market value (cost base) of your business interest to be established as at 1 July 2027 for future CGT purposes.

Why is this important?

A Business Valuation is based on the information that is known, or reasonably foreseeable, at the valuation date. This includes market conditions, industry trends, business-specific risks and the commercial factors influencing value at that point in time.

The challenge is that much of this evidence exists around the valuation date, not necessarily years later when your business is eventually sold. Attempting to reconstruct those circumstances long after the event can become increasingly difficult, costly and less reliable.

This is why documenting the evidence supporting your business value before 1 July 2027 is important now.

It allows relevant commercial information to be captured while it is current, rather than relying on memory or incomplete records years later. A review closer to 1 July 2027 can then confirm the evidence remains appropriate and capture any material changes.

Importantly, the quality of evidence available at the valuation date may influence the ability to support the inputs adopted in a future Business Valuation. Preserving contemporaneous evidence can therefore reduce uncertainty and provide greater confidence when that valuation needs to be relied upon.

Even if selling your business is many years away, now is an appropriate time to consider how the evidence supporting your business value will be documented and retained before 1 July 2027.

We've prepared a factsheet overview outlining:

• what the CGT changes may mean for business owners

• why preserving contemporaneous evidence around 1 July 2027 is important

• the options available for documenting that evidence, and

• the practical next steps to consider.

CAPITAL GAINS REFORM BUSINESS VALUATION FACTSHEET »

For many businesses, the most practical approach may be to complete a Risk & Value Driver Assessment – CGT Readiness, documenting and preserving the commercial evidence that exists today.

As 1 July 2027 approaches, that assessment can then be reviewed and updated to validate the information and capture any material changes before being securely retained to support a future Business Valuation, when required.

Every business will have different circumstances. We can help you determine whether commencing a Risk & Value Driver Assessment – CGT Readiness now, updating it closer to 1 July 2027, or obtaining a formal Business Valuation is the most appropriate approach for your business.

We encourage you to contact the Strategy360 By Collins Hume Advisory team to discuss your needs.