Unlocking the value in your Medical Centre

Is a Restructure Right for you?

If you’ve owned a medical centre for several years, chances are the business is worth far more today than when you first started. Strong patient demand, reliable fee income, and years of hard work all add up. Yet for many owners, that value remains locked inside the practice and isn’t easily accessible.

At GrowthMD, one strategy we implement with established medical centre owners is a restructure designed to unlock value by transitioning the existing business into a new trading entity, typically a company. Done correctly, this approach can create financial freedom for owners today while positioning the practice for long-term success.

Unlocking the value in your Medical Centre

How this strategy works

In practice, the current business entity sells the medical centre to a newly formed entity (usually a company) at market value. An independent valuation is required to support the sale price. The new company typically borrows to fund the acquisition, with the sale proceeds flowing to the existing owners. This approach allows practice owners to unlock value they’ve already built without selling to a third party or giving up control of the medical centre.

Increasing available cash

One key benefit of this strategy is the release of built-up equity in the business. In many cases, owners choose to use the cash proceeds from the sale to pay off personal, non-deductible debt, such as home loans. Reducing this type of debt can significantly improve personal cash flow and mitigate long-term financial pressure outside the business.

Tax-effective structure

Companies are commonly used as a long-term operating structure for medical centres because they are straightforward to understand and operate. Company profits are taxed at the 25% company tax rate, and shareholders are generally only taxed when dividends are paid. This differs from trust structures, where owners can be taxed on income even when cash is retained in the business. As a result, companies can provide more precise alignment between tax outcomes and cash flow.

Making succession easier

This strategy is also a powerful tool for succession planning. By introducing acquisition debt at the company level, the practice can become more accessible for future owners. Incoming doctors or key staff may require less upfront capital and lower personal borrowings to buy into the business.

Reducing these barriers to ownership can make partnership opportunities more achievable, supporting succession and, in turn, the continuity of care, leadership, and culture within the practice.

Restructuring with no tax

Selling the business, even internally, will usually trigger a Capital Gains Tax (CGT) event. However, where eligibility criteria are met, the small business CGT concessions will significantly reduce, and in many cases, eliminate CGT. Applying these concessions correctly requires careful assessment, documentation, and coordination; however, many of our medical practice clients have been eligible for these concessions and have paid nil to minimal tax on the sale of their business.

Is this right for every practice?

Not always. This strategy tends to suit established medical centres with genuine goodwill value, stable cash flow, and owners who meet CGT concession requirements. It also involves upfront costs and careful execution.

For the right practice, however, it can be a highly effective way to unlock value, reduce personal non-deductible debt, and position the business for smooth succession and long-term success.

How GrowthMD can help

At GrowthMD, we don’t just talk about strategy; we implement it. We work closely with medical centre owners to assess whether this approach fits their business goals and long-term plans. We coordinate valuations, tax analysis, lending and legal referrals to ensure the strategy is commercially sound and implemented correctly.

If you’re thinking about how to unlock the value in your medical centre or prepare for the next stage of ownership, a structured conversation can help clarify whether this strategy is right for you.

*Note that this blog is for general information only and should not be relied upon as specific advice. Conducting a restructuring exercise in your business requires specific tax and legal advice.