Business Valuations for CGT
An independent valuation can give a trade-business owner and their tax adviser a documented market value for capital gains tax purposes, where one is needed.
Why an independent valuation
Capital gains tax outcomes sometimes turn on what a business, or an interest in it, was worth at a particular date. Whether a market value is needed, and for which date, is a question for the owner’s tax adviser. Where one is needed, a written valuation gives the figure a documented basis instead of a number picked from memory or a rule of thumb.
Legislation passed in 2026 replaces the 50% CGT discount for individuals, trusts and partnerships with cost base indexation and a minimum tax rate on capital gains, from 1 July 2027. For assets held at 30 June 2027, the rules allow either a market value at that date or an apportioning method. Small business CGT concessions continue, and their maximum net asset value test relies on market values. How any of this applies to a particular owner is for that owner’s tax adviser, and our guide on business valuations for CGT covers the topic in more detail.
A valuation prepared now is not a valuation as at 30 June 2027. A valuation speaks to the date stated in it. If an owner’s adviser decides a market value at 30 June 2027 is wanted, that is a separate valuation with its own date, and what is possible depends on the information available for that date. Many owners will not need a valuation for CGT purposes at all.
When owners and advisers ask for one
- An owner whose adviser needs market values to test the maximum net asset value condition for a small business CGT concession
- An owner who plans to sell and whose adviser wants a documented value to work from when estimating the outcome
- A business owner whose adviser is considering the market value option for assets held at 30 June 2027
- A transfer of a business or shares between family members, related companies or trusts where a market value is needed
- A restructure into a new company or trust where the adviser wants market value evidence on file
- A partner or shareholder exit where the outcome depends on the value of the interest
- An accountant preparing a client file who wants independent valuation evidence rather than an internal estimate
What the valuation needs to address
Settled in the engagement letter before work starts, so the report answers the question it is being used for.
Valuation date
Tax outcomes can depend on a specific date, so the date is set to match what the adviser needs and stated in the report. A valuation prepared now is as at the date we state in it, not 30 June 2027. An additional historical valuation date is from $495 + GST where the engagement permits it.
Standard of value
Tax questions about value commonly refer to market value, the price a willing buyer and a willing seller would agree in an open market. We state the standard we have used, and the adviser confirms it is the one the question calls for.
Which entity and which asset
A trading business can sit in a company, a trust, a partnership or a sole trader’s name, and the property or intellectual property may be held elsewhere. We value the interest or asset the adviser identifies and say what is included.
Market values and the net asset value test
Because the maximum net asset value test relies on market values, a business valuation can be one input to it. It is not the whole test: property, investments and other assets need their own evidence, and which assets count is for the adviser.
Minority and controlling interests
If the interest is a share of a company or trust, its value is not always the same percentage of the whole. We address control, restrictions in the constitution, trust deed or shareholders agreement, and whether any discount applies, and we explain the reasoning.
Who relies on the report
The report is prepared for the client and the adviser named in the engagement. We do not say that any tax authority will accept it: the adviser decides how it is used.
How it runs
These engagements usually start with the owner’s accountant or tax adviser, who tells us the entity, the interest, the date and the question the valuation is meant to inform. We confirm that in writing before work starts. Intake starts online at /start, and accountants can refer matters through the accountant partner arrangement at $1,495 + GST per referred matter.
A draft report is provided before the report is finalised, so the adviser can check the facts and the assumptions against what they know of the client. Typical turnaround is 3 to 7 business days once all required information has been received. That is typical rather than promised, and complex matters can take longer.
The Independent Business Valuation is a fixed fee of $1,995 + GST. Matters with several entities, divisions, historical dates or unusual ownership are complex valuations, quoted in writing from $2,995 + GST before work starts. See pricing.
- Tell us about the business. Complete a short valuation intake.
- Upload your information. Financial statements and supporting information are securely uploaded through the client portal.
- We analyse the business. We review earnings, operating structure, industry characteristics, risks, assets and transferable goodwill.
- Valuation prepared. Appropriate valuation methodologies are applied and the evidence is documented.
- Draft and final report. You receive a draft before the report is finalised.
Important
We do not give tax advice. Whether a valuation is needed, at what date, and how it is used in a tax calculation or concession claim are matters for your accountant or tax adviser, and we do not say that any tax authority will accept a particular valuation.
Information on this website is general in nature and does not constitute legal, taxation or financial advice. The appropriate valuation approach depends on the circumstances and purpose of each engagement.
Common questions
Do I need a business valuation because of the CGT changes?
Not necessarily. It depends on your circumstances, such as whether you hold the business as an individual, trust or partnership, whether you plan to sell or restructure, and what your tax adviser decides about date and method. Ask your tax adviser first. If they want a market value, we can prepare one.
Is a valuation done now the same as a 30 June 2027 valuation?
No. A valuation is made as at the date stated in it, so one prepared now is not a valuation at 30 June 2027. If your adviser wants a market value at that date, it would be prepared for that date, and whether that can be done depends on the information available for it.
What happens to assets I hold at 30 June 2027?
For assets held at 30 June 2027, the rules allow either a market value at that date or an apportioning method. Which suits you is for your tax adviser to decide. If they choose market value, a valuation as at that date is one way to document it.
Will the ATO accept your valuation?
We do not give assurances that the ATO or any other party will accept a valuation. We set out the date, the standard of value, the information relied on and the reasoning in full, so your adviser and any reviewer can see exactly how the figure was reached.
Related
Start with a short intake. We confirm the fee and scope in writing.
An Independent Business Valuation is $1,995 + GST, with a draft before the report is finalised. Typical turnaround is 3 to 7 business days once all required information has been received.