Date: 21 September 2026
It’s no secret that the 2026 Federal Budget delivered some significant changes to the tax system, particularly in relation to Capital Gains Tax (CGT).
Much of the media coverage has focused on the potential impact on property values. However, there is another important issue business owners should be aware of: the opportunity to establish a new cost base for certain assets.
As a result of the proposed changes, many business owners may have the opportunity to “reset” the cost base of their business interests and other assets as at 30 June 2027.
Why Does This Matter?
For assets such as land, buildings, or share investments, the impact may be relatively straightforward, with the cost base generally determined by existing ownership costs and any applicable indexation provisions (subject to the final legislation being enacted).
However, the situation can be very different for business owners.
Imagine you started your own business from scratch. You invested years of hard work, built strong customer relationships, developed systems and processes, and perhaps purchased some equipment along the way. Unlike a property or a share portfolio, you didn’t actually purchase the business itself.
As a result, the tax cost base of your business interest may be very low, or even effectively nil.
Now imagine that after 30 June 2027 you sell that business for $3 million.
If your cost base is close to zero, the potential capital gain could be approximately $3 million.
However, if an eligible valuation establishes that the business was worth, say, $2 million as at 30 June 2027, the future capital gain may be reduced to approximately only $1 million.
While individual circumstances will vary and the legislation is still being finalised, the difference can be substantial and could potentially result in significant tax savings when the business is eventually sold.
Will Any Old Valuation Do?
No.
While the Australian Taxation Office has not yet provided detailed guidance on what will constitute an acceptable valuation under the proposed rules, history suggests that robust, well-supported valuations are far more likely to withstand scrutiny.
A credible business valuation should consider:
- Financial performance and profitability
- Industry-specific factors
- Market conditions and external benchmarks
- Business risks and opportunities
- Management capability and succession considerations
- Future growth prospects, not just historical results
Roberts + Morrow is well placed to assist with this process through:
- Specialist software and benchmarking tools
- Staff with dedicated valuation training and experience
- Our dedicated Business Intelligence team, which specialises in business performance analysis and valuation services
There’s More Than One Benefit to a Valuation
Even if tax considerations are not your immediate priority, knowing what your business is worth can provide valuable insights.
A professional valuation can assist with:
- Succession and exit planning
- Tax planning strategies
- Business improvement initiatives
- Identifying the key drivers of business value
- Shareholder and family business discussions
- Long-term strategic planning
Understanding the factors that influence value today can help you make decisions that improve the value of your business tomorrow.
Should I Wait Until 30 June 2027?
Ideally, no.
If you wait until 30 June 2027 and the valuation comes back lower than expected, there may be little opportunity to make changes that could improve the result from a tax perspective.
A preliminary valuation completed now can provide a useful benchmark and identify opportunities to increase business value before the 30 June 2027 valuation date.
The earlier you understand what drives value in your business, the more time you have to take action.
Conclusion
With 30 June 2027 approaching, now is the ideal time to understand what your business is worth and whether a valuation could deliver future tax and planning benefits. Contact Roberts + Morrow today to discuss a preliminary valuation and start preparing well before the deadline.
Reach out to: enquiries@rm.net.au
