Robin Lamb | Published 9 September 2026 | Updated 15 September 2026
One owner is preparing to leave. Family members are discussing succession. Existing owners want to change the proportions they hold.
Even where everyone agrees in principle, the financial arrangement needs to be clear. What is changing hands, between whom and on what terms?
The price is only part of the discussion. Existing debts, owner balances, payment timing and continuing responsibilities deserve attention before the arrangement is agreed.
Identify exactly what is changing
Transferring an interest in an entity is not the same as transferring the assets used by the business.
For a company, a shareholder owns shares rather than a direct portion of each company asset. A change of shareholders does not, by itself, create a new company or clear its existing debts.
For a trust or partnership, ask your solicitor to identify precisely which interests, rights or assets the proposal concerns. A change in control should not be treated as interchangeable with a transfer of ownership.
The initial discussion should identify:
- The interests or assets involved.
- The current and proposed holders.
- Any changes to management or control.
- What will remain unchanged.
This gives the accountant and solicitor a common starting point for assessing the proposal.
Separate the price from other amounts owed
An amount described as an owner’s “payout” may combine several different things.
It could include the price of an ownership interest, repayment of money lent to the business or a proposed distribution of profits. These amounts need to be distinguished rather than treated as one settlement figure.
Review recent financial statements and current records for:
- Loans owed to or by each owner.
- Amounts owed between related businesses or family entities.
- Accrued expenses and outstanding tax obligations.
- Proposed distributions before or at the ownership change.
Ask how each balance will be treated, who is responsible for payment and whether it is included in the proposed price. Your accountant should assess the accounting and tax treatment of each component.
Clear business records provide a better basis for this discussion than an agreed total with an unexplained breakdown.
Consider value and funding together
Clarify what the proposed value represents and the date it relates to. Existing agreements may contain relevant provisions, and an independent valuer may be appropriate where the value needs separate assessment.
Neither agreement between family members nor acceptance by the continuing owners necessarily resolves the valuation questions for tax purposes.
Then examine the payment terms. Will the departing owner receive payment immediately or over time? Who will pay, and where will the funds come from?
If the arrangement relies on business cash, distributions or additional borrowing, consider the effect on working capital and the ability to meet ordinary obligations. The business still needs funds for wages, suppliers and tax after an owner leaves.
Where borrowing is proposed, discuss the financial information a lender may need before relying on finance as part of the agreement.
Raise tax questions before fixing the terms
The tax analysis depends on the structure, the parties, what is transferred, what is received in return and the timing.
A family transfer or an arrangement without a cash payment still warrants assessment. For capital gains tax purposes, market value can be relevant where an asset is gifted or transferred on terms that are not at arm’s length. Receiving another asset instead of money can also have tax consequences.
Depending on the transaction, GST or state duty may need consideration. Queensland transfer duty can apply to certain property and business asset transfers, including some gifts.
Timing also deserves attention. For a disposal under a contract, the relevant CGT date can be the contract date rather than the payment or settlement date. Instalment payments should not be assumed to spread the tax outcome over the same period.
Any available concession or relief needs its own assessment. It should not be built into the agreed price or funding plan without advice.
Check which responsibilities will continue
Review finance documents, guarantees, leases and significant contracts with the lender and solicitor.
Ask whether the ownership change requires consent, affects the lending terms or creates a need for replacement security. Do not assume that leaving ownership releases someone from a personal guarantee or another contractual obligation.
If a release is intended, clarify what the relevant lender or other contracting party requires. An understanding between the owners is not a substitute for resolving that separate obligation.
Agree on the financial position at the change date
Decide what financial information is needed at the proposed change date and who will prepare and review it.
This might include current accounts, reconciled owner balances, outstanding invoices, stock information and estimates of tax still to be finalised.
Also address who will provide records, answer later queries and arrange outstanding accounts and returns. Have your solicitor document any agreed allocation of costs or responsibilities alongside the accountant’s assessment of the underlying obligations.
What to bring to an initial discussion
Bring current ownership and structure details, recent financial statements, owner and related party balances, relevant agreements, finance documents and proposed transaction terms.
Include any valuation material, intended distributions and payment arrangements.
Your accountant can assess the financial position and tax questions. Your solicitor addresses legal rights and documentation, with lender or independent valuation input where needed.
Speak with Jaha before committing to an ownership change, so the financial questions can be considered alongside the proposed terms.