Business Valuation Before 1 July 2027: CGT Changes for Australian Business Owners
For many Australian business owners, 1 July 2027 will create an important dividing line in the tax treatment of value built before and after that date.
Find out where your business stands
Spend 5 minutes answering 20 questions and get an immediate score showing your current business position, plus practical next steps to help strengthen your value before 1 July 2027.
Already have questions about your circumstances?
The Australian Government has confirmed that the current 50% CGT discount will be replaced from 1 July 2027 by inflation-based indexation and a 30% minimum tax on real capital gains. Importantly, the Treasury has also confirmed that small business owners will still qualify for the small business concession, meaning the existing 50% discount treatment will still apply, regardless of when the business is eventually sold.
That makes the next 10 months worth paying attention to, even if selling your business is nowhere on your immediate agenda.
What actually changes on 1 July 2027?
For eligible CGT assets, the Government’s reforms effectively create two periods.
Value built before 1 July 2027
Business value built before the change keeps the existing 50% CGT discount treatment.
Value created from 1 July 2027
The new inflation-based indexation and minimum 30% tax arrangements apply to gains accruing from that date.
The Government has been clear that the reforms are prospective; they apply to gains arising from 1 July 2027 rather than retrospectively changing the treatment of value already accumulated.
Read the Australian Treasury small business CGT explainer
The eventual CGT event may happen years from now.
But 1 July 2027 becomes an important reference point for the value that existed before the new arrangements began.
Do business owners have to get their business valued before 1 July 2027?
No. A formal valuation is not automatically required for every business.
The Government’s changes do not mean every owner needs to commission a valuation immediately.
What matters is understanding whether your business, ownership structure and circumstances make establishing a supportable value around 1 July 2027 worthwhile.
That may be particularly relevant if:
- significant value has been built in the business over many years
- your business has grown unevenly rather than at a steady rate
- goodwill represents a substantial part of the value
- you have multiple shareholders or a more complex ownership structure
- major contracts, customers or key employees materially influence value
- a transaction, succession or ownership change may happen in the future
If you are unsure whether a valuation makes sense for you, start by understanding your current position.
Why think about it now if business owners can deal with it later?
A historical valuation can sometimes be prepared later.
The challenge is reconstructing what the business genuinely looked like at the relevant date.
Years from now:
- management accounts may be harder to retrieve
- budgets and forecasts may no longer exist
- customer concentration may have changed
- contracts may have expired or been replaced
- key people may have left
- market conditions may look completely different
- the reasoning behind unusual results may be difficult to reconstruct
The ATO’s market valuation guidance places strong emphasis on using relevant and reliable information available at the valuation date, retaining evidence and ensuring any valuation is properly supported and defensible.
Read the ATO guidance on market valuation for tax purposes
Preserving the right evidence now can make your position clearer and easier to support later.
There is another practical reason to start now:
- You still have time to strengthen the value of the business before 1 July 2027.
Where does your business stand today?
Take the 5-minute Business Value & CGT Readiness Check
You can’t improve what you haven’t assessed first.
Spend 5 minutes answering 20 questions about your business and you’ll receive an immediate result showing where you stand today.
You’ll get:
- Your business position score: See how your business currently performs across the areas that can influence value.
- What your score means: Understand what your responses suggest about the current strength and readiness of your business.
- The areas helping or holding back value: Identify where your business is already strong and where greater attention could make a difference.
- Practical next steps: Receive clear priorities based on your score so you know what to focus on next to strengthen your business before 1 July 2027.
This check provides general information only. It is not a formal business valuation, tax calculation or tax advice.
When does a formal business valuation make sense?
A formal valuation can become useful when there is a genuine reason to establish an independent and supportable view of value.
That may include:
- CGT and tax planning
- succession planning
- shareholder changes
- ownership transfers
- restructuring
- estate or family planning
- preparing for a future sale
- disputes or forensic matters
A valuation can also become important where another party may eventually need to rely on the number.
The ATO notes that valuations used for tax purposes should be based on credible evidence, appropriate recognised valuation methodology and relevant information available at the valuation date.
If your business value was questioned later, could you support it?
There is a difference between having a number in mind and having a value that can be properly explained.
A supportable valuation generally considers:
- the relevant valuation date and purpose
- historical and current financial performance
- normalised earnings
- forecasts and future performance
- customer and revenue quality
- industry and market conditions
- business-specific risks
- value drivers
- appropriate valuation methodologies
- assumptions and supporting evidence
The ATO also makes clear that the responsibility for providing a replicable and defensible valuation remains with the taxpayer, even where a professional valuer has been engaged.
That makes the quality of both the valuation and the evidence behind it important.
What should business owners preserve before 1 July 2027?
Whether you obtain a formal valuation now or decide that one is not currently required, maintaining strong records around the date may still be worthwhile.
Consider preserving:
- financial statements
- management accounts
- budgets and forecasts prepared at the time
- recurring revenue information
- customer concentration data
- major customer and supplier contracts
- leases and licences
- details of management and key-person dependencies
- major capital expenditure
- acquisition and restructuring records
- strategy and board documents
- relevant market and industry information
Good evidence is easier to preserve now than recreate several years later.
Do business owners have to get their business valued before 1 July 2027?
No. A formal valuation is not automatically required for every business.
The Government’s changes do not mean every owner needs to commission a valuation immediately.
What matters is understanding whether your business, ownership structure and circumstances make establishing a supportable value around 1 July 2027 worthwhile.
That may be particularly relevant if:
- significant value has been built in the business over many years
- your business has grown unevenly rather than at a steady rate
- goodwill represents a substantial part of the value
- you have multiple shareholders or a more complex ownership structure
- major contracts, customers or key employees materially influence value
- a transaction, succession or ownership change may happen in the future
If you are unsure whether a valuation makes sense for you, start by understanding your current position.
Why think about it now if business owners can deal with it later?
A historical valuation can sometimes be prepared later.
The challenge is reconstructing what the business genuinely looked like at the relevant date.
Years from now:
- management accounts may be harder to retrieve
- budgets and forecasts may no longer exist
- customer concentration may have changed
- contracts may have expired or been replaced
- key people may have left
- market conditions may look completely different
- the reasoning behind unusual results may be difficult to reconstruct
The ATO’s market valuation guidance places strong emphasis on using relevant and reliable information available at the valuation date, retaining evidence and ensuring any valuation is properly supported and defensible.
Read the ATO guidance on market valuation for tax purposes
Preserving the right evidence now can make your position clearer and easier to support later.
There is another practical reason to start now:
- You still have time to strengthen the value of the business before 1 July 2027.
Where does your business stand today?
Take the 5-minute Business Value & CGT Readiness Check
You can’t improve what you haven’t assessed first.
Spend 5 minutes answering 20 questions about your business and you’ll receive an immediate result showing where you stand today.
You’ll get:
- Your business position score: See how your business currently performs across the areas that can influence value.
- What your score means: Understand what your responses suggest about the current strength and readiness of your business.
- The areas helping or holding back value: Identify where your business is already strong and where greater attention could make a difference.
- Practical next steps: Receive clear priorities based on your score so you know what to focus on next to strengthen your business before 1 July 2027.
This check provides general information only. It is not a formal business valuation, tax calculation or tax advice.
When does a formal business valuation make sense?
A formal valuation can become useful when there is a genuine reason to establish an independent and supportable view of value.
That may include:
- CGT and tax planning
- succession planning
- shareholder changes
- ownership transfers
- restructuring
- estate or family planning
- preparing for a future sale
- disputes or forensic matters
A valuation can also become important where another party may eventually need to rely on the number.
The ATO notes that valuations used for tax purposes should be based on credible evidence, appropriate recognised valuation methodology and relevant information available at the valuation date.
If your business value was questioned later, could you support it?
There is a difference between having a number in mind and having a value that can be properly explained.
A supportable valuation generally considers:
- the relevant valuation date and purpose
- historical and current financial performance
- normalised earnings
- forecasts and future performance
- customer and revenue quality
- industry and market conditions
- business-specific risks
- value drivers
- appropriate valuation methodologies
- assumptions and supporting evidence
The ATO also makes clear that the responsibility for providing a replicable and defensible valuation remains with the taxpayer, even where a professional valuer has been engaged.
That makes the quality of both the valuation and the evidence behind it important.
What should business owners preserve before 1 July 2027?
Whether you obtain a formal valuation now or decide that one is not currently required, maintaining strong records around the date may still be worthwhile.
Consider preserving:
- financial statements
- management accounts
- budgets and forecasts prepared at the time
- recurring revenue information
- customer concentration data
- major customer and supplier contracts
- leases and licences
- details of management and key-person dependencies
- major capital expenditure
- acquisition and restructuring records
- strategy and board documents
- relevant market and industry information
Good evidence is easier to preserve now than recreate several years later.
What about the small business CGT concessions?
The Government has confirmed that the four existing small business CGT concessions will remain.
From 1 July 2027, the turnover threshold for the 50% active asset reduction will also increase from $2 million to $10 million. Eligibility for individual concessions still depends on the relevant requirements and your circumstances.
Read Treasury’s guidance for small business owners
Your accountant or tax adviser should confirm how the concessions and broader CGT reforms apply to your specific structure.
Should you sell your business before 1 July 2027?
A major business decision should take account of much more than one tax change.
Your business value, personal plans, ownership structure, succession goals and overall tax position all matter.
For many established owners, the useful question to answer now is:
What is my business worth today, what is driving that value and what can I still strengthen before 1 July 2027?
That gives you a clearer position from which to make future decisions.
Your overall score
Foundations need attention
- 80-100 Strong position. Focus on protecting and preparing.
- 60-79 Developing position. Focus on strengthening and building.
- 20-59 Foundations need attention. Focus on clarifying and improving.
Here’s your category breakdown
Your Score: 51%
Should you sell your business before 1 July 2027?
A major business decision should take account of much more than one tax change.
Your business value, personal plans, ownership structure, succession goals and overall tax position all matter.
For many established owners, the useful question to answer now is:
What is my business worth today, what is driving that value and what can I still strengthen before 1 July 2027?
That gives you a clearer position from which to make future decisions.
We look at the business behind the number
AS Advisory works with established privately owned businesses across business valuation, advisory, forensic accounting and restructuring.
A valuation is more than a headline number.
We look at the earnings, quality of revenue, risks, customers, systems, people and commercial factors behind the business.
Andrew Schwarz and Lauren Elsum bring decades of experience helping established business owners understand value in the context of tax, ownership, succession, restructuring and major commercial decisions.
If you already know your circumstances warrant professional advice, we can help you understand the appropriate next step.
Frequently Asked Questions
What happens to business value built before 1 July 2027?
Do I need a business valuation before 1 July 2027?
Not every business owner does. Whether a formal valuation is appropriate will depend on your circumstances, ownership structure, relevant CGT asset, available evidence and future plans.
Is a 1 July 2027 valuation compulsory?
No. The reforms do not create a universal requirement for every business owner to commission a formal valuation on that date.
Can I work out the 1 July 2027 value later?
Should I sell before 1 July 2027?
What if my business is owned through a family or discretionary trust?
Trust structures can create additional considerations. Treasury has announced separate reforms affecting discretionary trusts, while the treatment of your particular business and CGT assets will depend on the structure and circumstances. Seek specific tax advice before acting.
Do the existing small business CGT concessions still apply?
Yes, the Government has confirmed that the four existing small business CGT concessions are staying, subject to their eligibility requirements.
What makes an independent valuation different from a rough estimate?
A formal valuation uses recognised methodology, financial and commercial evidence, assumptions and relevant market information to develop a supportable view of value. The ATO expects tax valuations to be credible, well documented and defensible.
How long does a business valuation take?
The timeframe depends on the purpose, complexity of the business, ownership structure and quality of the information available.
How much does a business valuation cost?
The scope and fee will depend on factors such as the size and complexity of the business, number of entities, purpose of the valuation and level of analysis required.
Get clear on your position before 1 July 2027
You don’t need to have all the answers today.
Start by understanding where your business stands, what is influencing its value and where you still have an opportunity to strengthen it before 1 July 2027.
Spend 5 minutes. Answer 20 questions. Get your score and practical next steps
Already know you need valuation or advisory support?
Official Resources
For further detail on the reforms and valuation requirements:
Australian Treasury – Capital Gains Tax and Discretionary Trusts Reform: Small Business Explainer
Australian Treasury – 2026–27 tax system changes
Australian Government – 2026–27 Budget tax reform overview
Australian Taxation Office – Market valuation for tax purposes
This page and assessment provide general information only and do not constitute tax, legal or financial advice. The application of the CGT reforms and any small business concessions will depend on your individual circumstances. Seek appropriate professional advice before acting.