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When a Tasmanian family moves its business, its premises or its shares from one entity it controls to another, the ATO and the State Revenue Office of Tasmania still look at the step as a transfer at market value. We set that value before anything is signed, so your advisers can test each rollover condition and duty question against a figure that will hold up later.
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A restructure valuation fixes the market value, on the day each step takes effect, of every business, asset or interest that moves between related entities. For Hobart groups it underpins the federal rollover tests, Division 7A and Tasmanian transfer and landholder duty, and it is the record a buyer, a lender or the ATO reads years later.
Many Hobart businesses are family-owned and have grown through layers of entities added over the years: a trading company, a discretionary trust, a super fund that owns the premises, perhaps a second company for a later venture. When the family reorganises, the same people often sign for both sides, no money changes hands, and the documents come from the accountant who prepares the annual returns. Nobody is pushing back on the price, so the figure written down tends to be book value or whatever made the ledger balance.
A capital gains event between related parties is measured at market value whatever the contract records, and each rollover that defers the gain carries a condition framed in market value. Under the Duties Act 2001 (Tas), the State Revenue Office of Tasmania can charge transfer duty when Tasmanian land moves between your entities, and landholder duty when someone acquires an interest in a company or unit trust that holds Tasmanian land; in both cases duty generally turns on value, not just the price written down. If a private company passes value to a shareholder or associate along the way, Division 7A asks a third question. A book figure answers none of them.
Skipping the valuation does not save the cost; it moves it to a worse moment. The questions arrive when the group is sold, a sibling wants out, the bank refinances or the ATO opens a review. By then the steps cannot be reversed, and the value on the day has to be pieced together from records nobody kept for that purpose.
We value restructures for owners across southern Tasmania and the rest of the state: a Glenorchy electrical contractor incorporating after years as a sole trader, a Huon Valley family taking its orchard land out of the trading company, a North Hobart software firm putting a holding company on top before it raises capital. Designing the steps and picking the rollover is work for your accountant, tax adviser and lawyer. Our part is the value each step relies on, signed by a certified valuer who will defend it.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Your tax adviser picks the rollover and your lawyer works through the duty position. Both need a market value to measure against, and the four regimes below are the usual reasons a Hobart restructure needs one.
A private company that hands an asset to a shareholder or associate for less than it is worth, or lends money around the group without a complying loan agreement, can be treated as paying a dividend. A restructure can create either one by accident. Whether there was a shortfall, and how large, can only be measured against a market value.
Interposing a holding company, exchanging shares or units for new ones, or rolling a business into a company generally requires each owner to come out with the same proportion of market value they went in with. Other rollovers weigh what a party receives against what it gives up. When share classes differ, loan accounts are uneven or holdings are unequal, both sides of that comparison have to be valued.
The State Revenue Office of Tasmania administers the Duties Act 2001 (Tas). Transfer duty can arise when Tasmanian land moves between your entities, and landholder duty when an interest in a company or unit trust that holds Tasmanian land is acquired. Duty is assessed on its own terms, separately from income tax, and the State Revenue Office may want evidence of the land value apart from the business. Your lawyer confirms how the rules in force on the day apply to each step.
Subdivision 328-G lets a small business entity move active assets to another entity in a genuine restructure without a taxable gain, as long as ultimate economic ownership does not change. If the owners' holdings look different before and after, ownership is demonstrated in value terms. Values fixed at the transfer date are also useful evidence that the restructure served a genuine business purpose.
The ATO and the State Revenue Office of Tasmania are not the only readers. A minority shareholder whose proportion has to come through intact, beneficiaries of a family trust whose assets are moving, a bank whose security ends up in a new entity, a landlord asked to consent to an assignment and staff holding options all rely on the figures. For retail premises, such as a shop in Salamanca Place, an assignment also has to fit the lease and the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 (Tas), and where landlord and tenant cannot agree, Consumer Affairs Tasmania can help before the matter moves to conciliation. A documented valuation shows each of these parties that the restructure did not cost them value.
Placing a new holding company above an operating company or a family trust. Moving a business, a division, freehold premises or a brand from one entity to another. Varying a family trust deed, splitting the trust or bringing its vesting date forward. Dividing a family group between siblings or between business lines. Admitting an outside investor or a key employee as a shareholder, or buying out one who wants to leave. Clearing out dormant companies and cross-holdings left from earlier generations. Separating what a buyer will want from what the family keeps, well before any sale.
We start by listing what actually moves and when. A trading business that changes hands is valued as a going concern. A block of shares or units is valued as a block, with its voting power, its restrictions and any rights ranking ahead of it. An asset that moves by itself is valued by itself, and in a Hobart family group that is often something never priced before, such as a trading name built up over decades, a list of wholesale customers or the benefit of a long lease on good premises. Each value is fixed at the date its step takes effect.
For a trading business the income approach leads. We work out maintainable earnings after a market salary for working owners, arm's length rent on family-owned premises and the removal of one-off items, then capitalise them at a rate that reflects the risk, including the seasonal swings that many Tasmanian tourism and hospitality operators trade through. Assets that never appear on the balance sheet are valued as an acquirer would value them in a purchase price allocation: customer relationships and contracts by multi-period excess earnings, a brand or technology by relief from royalty, and software built in house at replacement cost. Handing one of these over for nothing, when a buyer would clearly pay for it, is how a single step ends up with tax, duty and Division 7A problems at once.
The asset approach counts for more in a restructure than in a sale, because a common reason to reorganise is to lift freehold premises and surplus assets out of the entity that carries the trading risk, whether that is a workshop in Moonah or consulting rooms in Sandy Bay. Land is valued on comparable sales, and where the State Revenue Office of Tasmania needs a formal land valuation, a qualified property valuer prepares it alongside our work. The market approach then checks the business value against comparable transactions, so the figure used between family entities is one an outside buyer would recognise.
Very few of these problems show on the day the documents are signed. They surface on a sale, a family member's exit, a refinance or a review by the ATO or the State Revenue Office of Tasmania, when the steps are already locked in.
A restructure is usually relied on by the ATO, the State Revenue Office of Tasmania and, later, a buyer or a bank, so a certified report is the normal choice. An Indicative report, which is for internal decision-making, earns its place earlier, while the family is still deciding whether to restructure at all and what the tax and duty bill might look like.
For each asset and interest that moves, the report sets out the valuation date, the standard and premise of value, the information relied on, and the method and inputs used. Intangibles are valued separately, with every assumption stated. Where a rollover depends on proportions, the before and after holdings appear on one basis so the test can be read straight off the page, and land sits in its own schedule so the figure the State Revenue Office of Tasmania needs is never blended with the tax figure.
Those who scrutinise a restructure years later had no part in planning it: a buyer's due diligence team, the lawyer for a family member who has left, an ATO officer, a duty assessor, or the Supreme Court of Tasmania if the owners fall out. Expert reports in that court must comply with Part 19 of the Supreme Court Rules 2000 and the Expert Witness Code of Conduct attached to the court's Practice Direction No 1 of 2016, and ours are written to that standard from the start. A certified valuer signs the report, talks it through with your tax adviser and lawyer by video call or phone while the steps are settled, and defends it if it is challenged. Order matters too: values obtained before execution can still reshape the steps, while values obtained afterwards can only record them.
Which test does this step measure in market value? What is that value on the signing date? Which document will prove it? If any answer is missing, the step is not ready.
Talk your situation through with a certified valuer before you commit to anything, at no cost.