Do simple internal restructures require valuations?
Internal restructures often trigger what is known as a Capital Gains Tax (CGT) Event.
The Australian Tax Office has clear rules regarding events that trigger Capital Gains Tax implications.
Most restructures, change of entity or change in shareholders will trigger a CGT Event.
It is important to note this is regardless of whether the ultimate owners of the business change.
Obtaining an independently conducted Business Valuation at the time of the restructure can help demonstrate to the ATO, and any other stakeholders, that the restructure has been conducted professionally and accurately. This can be particularly important as the ATO, in the absence of an appropriately conducted valuation, can conduct their own valuation of a business entity for the purpose of tax assessments. The result of an ATO valuation can sometimes be hard to challenge.