Case Study: Expert Valuation Enables $6M Tax-Free Payment Through CGT Rollover Restructure
Overview
In today’s complex tax environment, strategic business restructuring can unlock significant financial benefits—if executed with precision and compliance. This case study outlines how our expert valuation services enabled a professional services firm to restructure under the Small Business Restructure Rollover (Subdivision 328-G), facilitating a $6 million tax-free payment between entities.
Client Background
Our client, a mid-sized professional services firm, was preparing for a structural transition to better align with its long-term growth strategy. The firm’s owners aimed to move from their existing entity to a newly formed one, while preserving business value and minimising tax exposure.
The restructure was not merely administrative—it was a financial strategy requiring a defensible valuation and strict adherence to Capital Gains Tax (CGT) rollover provisions.
The Challenge
The firm faced several key challenges:
Avoiding CGT Liabilities: Ensuring the restructure did not trigger immediate tax consequences.
Meeting Eligibility for Subdivision 328-G: Complying with the ATO’s requirements for a genuine restructure under the Small Business Restructure Rollover.
Valuation Integrity: Establishing a market value that would withstand ATO scrutiny.
Liquidity Planning: Enabling a tax-free transfer of $6 million between the old and new entities.
Our Approach
We delivered a comprehensive expert valuation report that:
Assessed the fair market value of the business using industry-appropriate methodologies.
Aligned with the eligibility criteria under Subdivision 328-G of the Income Tax Assessment Act 1997, including:
The transfer of active CGT assets as part of a genuine restructure.
No change in the ultimate economic ownership of the business.
The restructure being commercially driven, not tax-avoidance motivated [1].
Provided the basis for a $6 million inter-entity loan, enabling a tax-free payment.
We collaborated closely with the client’s legal and accounting advisors to ensure the valuation supported the broader restructure strategy and met all compliance requirements.
Key Actions Taken
Expert Valuation Report: Delivered a detailed, ATO-compliant valuation report with supporting financial analysis and sensitivity testing.
CGT Rollover Strategy: Structured the transaction to qualify for rollover relief under Subdivision 328-G.
Loan Facilitation: Enabled the creation of a $6 million loan between the old and new entities, facilitating a tax-free payment.
Stakeholder Coordination: Worked with legal and tax advisors to ensure seamless execution and documentation.
Results
✅ Successful Restructure: The firm transitioned to its new structure without incurring CGT liabilities.
💰 $6 Million Tax-Free Payment: The inter-entity loan was executed in full compliance with rollover provisions.
📄 ATO-Ready Documentation: Our valuation report provided robust support for audit and compliance purposes.
🤝 Client Confidence: The owners gained peace of mind knowing the restructure was both financially sound and legally defensible.
Why This Matters
This case highlights the critical role of expert valuation in enabling strategic restructures. By aligning valuation methodology with tax law, we helped the client:
Preserve business value.
Avoid unnecessary tax costs.
Unlock liquidity for reinvestment or distribution.
Strengthen compliance and audit readiness.
In an era of increasing ATO scrutiny, especially around restructures and inter-entity transactions, having a trusted valuation partner is essential.
Contact Us Today
If your business is considering a restructure or needs expert valuation support for tax planning, contact us today. We specialise in delivering defensible, compliant, and commercially valuable valuation reports tailored to your strategic goals.