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When a business, a property or a parcel of shares moves between entities the same family or group already controls, the ATO and State Revenue Office Victoria still treat it as a transfer at market value. We set that value before the documents are signed, so each rollover condition and duty question is tested against a figure that will stand.
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A restructure valuation fixes the market value, on the transfer date, of each business, asset or interest moving between related entities. Federal rollover conditions, Division 7A and Victorian land transfer and landholder duty are all measured against that value, and a contemporaneous report is what protects the group when it is later sold, audited or divided.
An internal restructure rarely feels like a transaction. The owners are the same on both sides of the page, often no cash moves, and the documents are prepared by the accountant who already keeps the books. Because nobody is negotiating, nobody tests the price, and the figure that lands in the transfer documents is frequently the written-down book value or a number chosen for convenience.
The tax and duty rules take the opposite view. For capital gains purposes a transfer between related parties is treated as made at market value whatever the documents say, and the rollovers that defer the gain are conditional on tests that are themselves expressed in market value. In Victoria, land transfer duty under the Duties Act 2000 (Vic) is assessed on the greater of the consideration and the unencumbered value of the land, and landholder duty can reach a transfer of shares or units in an entity that owns Victorian land. Where a private company gives up value to a shareholder or an associate, Division 7A asks the same question again. None of these regimes accepts a book figure as evidence.
Skipping the step defers the cost rather than avoiding it. A restructure built on an assumed value tends to stay quiet until the group is sold, a family member leaves, a lender reviews its security or the ATO opens an enquiry. By then the transfer cannot be reversed, and the market value on the day has to be rebuilt from whatever records survived.
We value restructures for Melbourne owners at every scale: a Cranbourne electrician moving from sole trader to a company, a Doncaster family lifting its Dandenong South factory out of the operating entity, a Cremorne software business putting a holding company in place before a capital raise. Your accountant, tax adviser and lawyer design the steps and decide which rollover or exemption applies. We provide the values each step relies on, and we stand behind them.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Choosing the rollover and claiming any duty exemption is your advisers' work. Our part is the figure each one is tested against, and the four regimes below are where that figure is needed.
Interposing a holding company, swapping shares or units, or moving a business into a company generally calls for each owner to leave the new structure with the same proportionate interest, by market value, that they brought into it. Other rollovers compare what a party receives with what it gave up. Where share classes, loans or holdings are uneven, that comparison can only be made by valuing the interests on each side.
A small business entity may transfer active assets to another entity in a genuine restructure without realising the gain, as long as ultimate economic ownership does not change. When the holdings before and after are not mirror images, the ownership test is shown in value terms, and a valuation prepared at the time is useful evidence that the restructure had a real commercial purpose.
A private company that hands an asset to a shareholder or associate for less than it is worth, or lends money inside the group without a complying loan agreement, can produce a deemed dividend. Restructures create both situations easily. The market value is how anyone can tell whether the consideration fell short, and by how much.
State Revenue Office Victoria assesses land transfer duty on Victorian land, and landholder duty on significant interests in companies and unit trusts that hold it, by reference to unencumbered value where the parties are related. The Duties Act 2000 (Vic) provides an exemption for qualifying reconstructions within a corporate group, but it carries association requirements before and after the transfer and must be applied for. The Commissioner can ask for land valuation evidence of its own.
The ATO and the revenue office are not the only readers. A minority shareholder whose proportion must survive the restructure, beneficiaries of a family trust whose assets are moving, a bank whose security now sits in a different entity, a landlord whose consent is needed to assign a lease and an employee holding options all rely on the values used. For a retail premises lease, assignment to the new entity is governed by the Retail Leases Act 2003 (Vic), and the Victorian Small Business Commission mediates if landlord and tenant cannot agree. An independent figure shows that the restructure did not move value away from any of these people.
Putting a holding company over a trading company or trust. Moving a business, a division, freehold premises or intellectual property from one entity to another. Varying, dividing or vesting a discretionary trust. Splitting a group between siblings or between business lines. Bringing in a new shareholder or settling with one who is leaving. Collapsing an inherited tangle of dormant companies and cross-holdings. Ring-fencing the assets a buyer will want, a year or more before a sale.
Every step is valued at market value on the date it takes effect. When a whole business changes entity, that is an ordinary business valuation. When a parcel of shares or units moves, the parcel is valued with the rights, restrictions and voting position attached to it. When a single asset moves on its own, it is valued on its own, and in a restructure that is often an asset nobody has ever put a number on: a brand, a customer book, a software platform or the benefit of a lease.
A trading business is valued with the income approach in the lead: maintainable earnings, adjusted for owner pay, related-party rent and fees and non-recurring items, capitalised at a rate that fits the risk. Assets that sit off the balance sheet are valued with the tools used to allocate a purchase price on an acquisition: relief from royalty for a brand or technology, multi-period excess earnings for customer relationships and contracts, and replacement cost for software written in house. Moving one of these at nil when it plainly has value can engage the CGT, duty and Division 7A rules in a single step.
The asset approach matters more here than on a sale, because many Melbourne restructures exist to lift freehold premises and surplus assets out of the trading entity. Land is valued by reference to comparable sales and, where State Revenue Office Victoria needs it, by a registered property valuer working alongside us. The market approach then checks the business value against transactions, so the figure the group uses internally is one an outside buyer would recognise.
Few of these are visible on the day. They surface on a sale, a shareholder exit or an ATO or State Revenue Office Victoria review, after the steps can no longer be reversed.
A restructure usually needs a certified report, because the ATO, State Revenue Office Victoria and any future buyer or lender may all read it. The Indicative report earns its place earlier, while the owners are still weighing whether the restructure is worth doing and what it might cost in tax and duty.
The report lists each asset and interest that moves, the valuation date, the standard and premise of value and the documents relied on, then the method and inputs for every item. Intangibles carry their own valuation with the assumptions stated. Where a rollover depends on proportions, the interests before and after are presented on one basis so the test can be read straight off the page, and land is reported apart from the business so the figure State Revenue Office Victoria needs is not tangled up with the tax figure.
Restructures are examined later by people who were not in the room: a buyer's diligence team, a departing family member's lawyer, an ATO case officer, a revenue office assessor or, in a dispute between shareholders, the Commercial Court of the Supreme Court of Victoria. The report is written for that reader. A certified valuer signs it, works through it with your tax adviser and lawyer while the steps are being settled, and will defend it if it is challenged. Timing matters: a valuation obtained before execution can still change the steps, while one obtained afterwards can only record them.
For each step: which condition is measured in market value, what is that value on the signing date, and where is the document that says so? If any of those answers is missing, the step is not ready to sign.
Talk your situation through with a certified valuer before you commit to anything, at no cost.