Free 1 July 2027 Valuation Diagnostic
On 1 July 2027, a line gets drawn through what your business is worth
Growth up to that date keeps the old capital gains rules, whenever you eventually sell. Growth after it does not. One number decides where the line falls, and if you have not established it, a default formula decides it for you.
Free. Ten questions. It will tell you plainly if the answer is no.
Where the line falls
Same business, same sale price, two ways to set the 2027 value
- Gain that keeps the 50% discount
- Gain under the new rules
What changed, and what didn't
This is law, not a proposal. It applies whether you sell next year, in a decade, or never.
Start with the good news
The small business capital gains concessions, the ones that do the real work when you sell a business, came through the reform. All four of them.
One got better: the turnover test for the 50% active asset reduction rises from $2 million to $10 million. If your exit plan was built around those concessions, it still works. This is not a story about business owners being taxed more when they sell.
What did change
From 1 July 2027, for individuals, trusts and partnerships, the flat 50% discount is replaced by two things: your cost base is indexed for inflation, and a 30% minimum tax rate applies to the real gain.
To bridge the old system and the new one, every affected asset is treated as sold and bought back at market value on that date. Nothing is taxed by that. It splits your eventual gain in two: the part built before, which keeps the discount, and the part after, which does not.
You get to choose. But only if you know the number.
The law lets you set your 1 July 2027 value two ways, and you can elect whichever suits you. Here is the catch almost nobody mentions: you cannot tell which one suits you without knowing what the business is actually worth. Guess, and you are not choosing. You are accepting a default.
The apportionment formula
Works out your 2027 value by assuming the business grew at one steady rate across the whole time you have owned it.
When it wins
Most of your growth is recent, or still ahead of you. The formula spreads that growth backwards across your whole ownership, pushing more of it onto the side of the line that keeps the discount.
The catch
It is also what applies if you do nothing. For most owners it is not an option they chose. It is what happened to them.
A market valuation at the date
Establishes what the business was actually worth on 1 July 2027, on evidence.
When it wins
You built most of the value years ago and growth has since flattened. The formula understates your 2027 position and pushes growth you earned under the old rules into the new ones. The longer you have owned it and the earlier the growth came, the more that costs.
What it really buys
A choice. Getting a valuation does not commit you to using it. If the formula turns out better, you elect the formula. What you have bought is the ability to compare, on a date that only comes round once.
Two examples, going opposite ways
The right answer depends on when your growth happened. These two businesses land on opposite sides, and the only way either owner knows is by having the figure.
The business that grew early
An engineering business started from scratch in 2010, built up hard through the 2010s, worth $2,200,000 by mid-2027 and fairly flat since. Sold in 2035 for $2,500,000. The goodwill was built, not bought, so the cost base is nil and the whole $2,500,000 is gain: 25 years of ownership, 17 of them before the line.
| Method | Gain keeping the discount | Gain under new rules | Tax on that at 30% * |
|---|---|---|---|
| Formula | $1,700,000 | $800,000 | $240,000 |
| Valuation | $2,200,000 | $300,000 | $90,000 |
The valuation moves $500,000 of gain back across the line and cuts the tax on the new-rules portion by $150,000. The discounted portion grows as a result, so the net saving depends on the marginal rate applying to it.
The business that grew late
An established business bought in 2022 for $1,200,000. Quiet at first, worth $1,300,000 at 1 July 2027, then a strong run to a sale in 2032 at $2,200,000. Total gain $1,000,000 across 10 years of ownership, split evenly either side of the line.
| Method | Gain keeping the discount | Gain under new rules | Tax on that at 30% * |
|---|---|---|---|
| Formula | $500,000 | $500,000 | $150,000 |
| Valuation | $100,000 | $900,000 | $270,000 |
This owner elects the formula and is around $120,000 better off on the new-rules portion for it. Notice how they know: somebody established the figure and compared the two. Assume the formula is fine and you might land in the same place by luck. On a business with a different growth curve, the same assumption costs money.
* Tax shown is on the gain arising under the new rules, at the 30% minimum rate; a higher marginal rate can apply. Figures are shown before cost base indexation, which reduces the new-rules gain under either method. They assume no small business CGT concessions are available. Where they are, and for many small businesses they will be, the amount actually taxed is lower, in some cases nil. Tax on the discounted portion depends on marginal rates and is not shown.
Illustrative examples only. Figures depend on the final apportionment method, eligibility tests, valuations and individual circumstances. They are not advice and should not be relied on.
Three groups who assume this isn't about them
"My business is in a company, so the discount change doesn't affect me."
True of the company. Not necessarily true of you. The company never had the discount and does not get indexation either, so nothing changes for it.
But it depends how you get out. If the company sells the business, the company pays tax at the company rate and the money reaches you as franked dividends: the 2027 line never touches that path. If the shares are sold instead, that is a capital gain for whoever holds them, individuals and trusts included, so the line runs straight through the shareholding. Most sales are not settled as one or the other until late in the negotiation, so you may not know which path you are on until the number matters.
"I've owned it since before capital gains tax existed."
That exemption stops at 1 July 2027. Growth up to then stays exempt; growth after it is taxable. For a business or farm held since the seventies, one number separates decades of tax-free value from everything that follows. This is the group with the most at stake and the thinnest records to support a valuation later.
"I'm not selling, so it doesn't matter yet."
It matters more, not less. A valuation done around 1 July 2027 is solid evidence. The same valuation pieced together in 2035 is an opinion about a date eight years gone, formed without the records, the market data, or the business as it was then. You get one chance to capture this properly, and it is not when you sell.
What the diagnostic tells you
Ten questions about what you own, when you got it, where the growth actually came from and how you would eventually get out. It runs the same logic we would apply in a paid review.
Worth acting on
The figure is likely to matter. Establish it while it can still be done properly.
Worth a conversation
Knowing the number buys you a choice you do not otherwise have.
Nothing to do yet
One of the two situations where this can safely wait, and we will say so.
Which way the formula leans for you
Whether your growth pattern means the default helps you or quietly costs you.
What is driving the answer
How ownership length, value at stake, likely concessions and your exit route each push the result.
Your structure, explained properly
Company, trust or held directly, and what that means at the point you sell.
A report to keep
Your result on screen straight away, plus a PDF to download and share with your partner or accountant.
How it works
1
Answer ten questions
Multiple choice. Ranges are fine: you do not need your financials or a valuation to hand.
2
Tell us where to send it
Your name, email and business name, so we can send your report.
3
See your answer
Your result appears on screen with a PDF to keep. Book a free clarity call if you want to talk it through.
Who it's built for
The diagnostic is built for owners of trading businesses, where there is no market price to look up on the day.
A good fit if you
- Own a business held directly, in partnership, in a company, or in a family or unit trust
- Built it from nothing, or bought it years ago and grew it
- Have held it since before September 1985, including family farms and long-held businesses
- Plan to sell, hand it on, or simply do not know yet
- Want to know where you stand before the date, not after it
Not the right tool if
- Your only assets are investment property or listed shares
- You want a valuation figure from the tool itself: it tells you whether you need one
Built by business advisors who work on exits
Your Success Lab is an Adelaide-based business advisory and accounting firm. We work with owner-operators across Australia on growth, structure, succession and exit, so the 2027 line sits squarely in the work we already do.
The diagnostic uses the same thinking we bring to a first conversation. It will not replace advice, but it will tell you whether this deserves your attention now.
Founded by Andrew Mattner
25+ years in business, and has personally scaled 7 businesses
Directors Daniel Lalic and Christian Sloniec
Advisory, accounting, tax, succession and exit planning under one roof
Based in Adelaide
Level 7, 33 King William Street, working with owners Australia-wide
It is law. The changes passed Parliament in June 2026 and apply from 1 July 2027. Some detail, including the exact apportionment method, is set by a legislative instrument and may still change.
No. You can elect whichever method leaves you better off. The valuation is what lets you compare the two on a real figure instead of guessing.
Because by then you are valuing a date that has long passed, without the records, market data or business as it stood. A valuation prepared around 1 July 2027 is far stronger evidence than one pieced together years later.
No. Every question is multiple choice and uses ranges. Your best estimate is enough.
Yes. No cost and no obligation, and if the answer is that you need nothing, it will say so.
We use them to send your report. You will also hear from Your Success Lab with practical advice for business owners, and you can unsubscribe in one click. We never sell your data.
No. It is general information that points you in a direction, not a calculation of your tax. Your trust deed, prior use of concessions, family arrangements and the final form of the rules can all change the answer. Get advice specific to your circumstances before acting.
One date. One number. Then it is settled for good.
1 July 2027 will pass whether you have prepared for it or not, and the figure it fixes will follow your business for as long as you own it. Take the diagnostic to see where you stand, or book a free clarity call to talk it through.
Free. No obligation. We will tell you if the answer is that you need nothing.