- The net value of the assets of you and certain related entities must not be more than $6 million just before the CGT event.
- Assets are counted at market value, less related liabilities and some provisions. Goodwill counts.
- Connected entities are counted, and an affiliate's assets count if they are used in your business.
- Your home, super and life insurance are largely left out, and the $6 million limit is not indexed.
- Your accountant applies the test. We value the business and other assets they need valued.
What the test asks
The maximum net asset value test is one of the basic conditions for the small business CGT concessions. To pass, the total net value of the CGT assets held by you and certain related entities must not be more than $6 million. It is measured just before the CGT event that gives rise to the gain. The $6 million limit is not indexed for inflation.
You only need this test if you do not qualify another way, most commonly by having aggregated turnover under $2 million. Your accountant will tell you which route applies.
How net value is worked out
For each entity in the count, the net value is:
- the market value of its CGT assets
- less liabilities related to those assets, such as a loan used to buy business premises or an overdraft that funds the business generally
- less provisions for annual leave, long service leave, unearned income and tax liabilities
Other provisions, such as a provision for possible damages or for rebates, are not taken off. A liability tied to an asset that is left out of the count is not taken off either.
Whose assets are counted
This is where the test reaches further than people expect. In general terms, you add together the net value of assets owned by:
- you
- entities connected with you, broadly companies, trusts and partnerships you control, alone or with your affiliates, and in some cases entities that control you
- your affiliates and entities connected with them, but only for assets used, or held ready for use, in a business run by you or an entity connected with you
An affiliate is, broadly, someone who acts in line with your directions or wishes in their business affairs. A family member is not automatically an affiliate. Working out connected entities and affiliates is a legal question for your accountant, and it often decides which assets need a value.
What is left out
For an individual, the test generally leaves out:
- assets used solely for personal use and enjoyment
- your home, to the extent it is used privately (part may count if part of it is used to earn income)
- rights to super and assets of a super fund
- insurance policies on your life
Shares and units you hold in your own connected entities are also left out, because the entity's assets are counted directly. Note that a personal bank account that earns interest is not a personal use asset, so it counts.
Why book value can mislead
Your balance sheet is a starting point, not the answer. The test asks for market value, and the two can be far apart:
- Goodwill. Goodwill you built yourself is usually not recorded at all. A profitable business can carry significant goodwill that only a valuation will show.
- Property and long-held assets. Land and buildings may be recorded at what they cost years ago.
- Plant and equipment. Written-down values for tax can be well below, or above, what the items would sell for.
- Intangibles. Brands, customer lists, software and licences may carry no book value.
A business with modest net assets in its accounts can be over $6 million once goodwill and property are counted at market value. That is the most common reason accountants ask for a valuation for this test.
Being close to $6 million
If the total is clearly well under or well over $6 million, the exact figure may matter less. When it is close, every input counts, and the reasoning behind each value matters as much as the number.
In that situation it helps to:
- value at the right date, just before the CGT event
- have goodwill and other major assets valued separately, so your accountant can see what drives the total
- keep the evidence from the time: accounts, contracts, customer and staff information
- make sure related entities are valued on the same basis and at the same date
We value at market value on the evidence. We do not aim for a figure on one side of the line. Your accountant decides how the test applies.
What the valuation report covers for this purpose
For the net asset value test, the Professional Valuation Report sets out:
- each business, share or interest valued, and its owner
- the valuation date, usually just before the CGT event
- market value as the standard of value
- separate values for goodwill and other major assets where your accountant asks
- the method, earnings, adjustments, evidence, assumptions and limitations
- the signature of the valuer responsible
Real property is outside what we value on this site. If land or buildings are in the count, your accountant may need a separate property valuation.
What we need from you
- A structure chart or list of the entities your accountant says are in the count
- Financial statements, tax returns and management accounts for each business entity
- The date of the CGT event, or the expected contract date
- Loan statements and details of provisions at that date
- Any existing valuations of property or equipment
- Key contracts, leases and a customer summary
Get a fixed fee
Our fee is fixed by annual revenue, starting at $1,495 + GST for revenue under $1 million, and revenue of $10 million or more is a custom fixed-fee quote. If several entities need values, ask us for one fixed quote. See pricing or start here.
General information only, current at 10 November 2026. We value businesses and business interests; we do not give tax advice. Your accountant or tax adviser decides whether a rule applies to you.