- A capital gain or loss on an asset acquired before 20 September 1985 is generally disregarded.
- An asset owned by a private company or trust can stop being pre-CGT if the majority underlying ownership changes; it is then treated as acquired at that time.
- Selling pre-CGT shares or units can still produce a gain where most of the company's or trust's net value comes from assets acquired later.
- Goodwill of a long-running business keeps its pre-CGT status only while it is the same business.
- Your accountant or tax adviser decides whether an asset is still pre-CGT; we value it at the date they identify.
What a pre-CGT asset is
Capital gains tax started on 20 September 1985. An asset acquired before that date is called a pre-CGT asset. For most CGT events, a capital gain or loss on a pre-CGT asset is disregarded.
For business owners this often means:
- a business, and its goodwill, started or bought before that date
- shares in a family company acquired before that date
- units in a unit trust acquired before that date
That status is valuable, which is why the rules watch closely for anything that ends it.
When pre-CGT status can be lost
The rules are detailed and your adviser applies them. In general terms, the main situations are these.
A change in underlying ownership of a company or trust
An asset owned by a private company or trust stops being pre-CGT at the earliest time when the majority underlying interests in it are no longer held by the people who held them just before 20 September 1985. When that happens, the asset is treated as acquired at that time, and its cost base is worked out from that date. A market value at that date is often needed.
That market value is often needed years later, when the asset is sold. For a business, that can mean valuing the goodwill, or the whole business, at the date ownership changed. Underlying ownership can shift gradually, through gifts, deaths, new shareholders or new beneficiaries, so the date itself may need careful work by your adviser first.
Selling pre-CGT shares or units when later assets dominate
Pre-CGT shares in a company, or interests in a trust, are not a complete shelter. If you sell them and, just before the sale, property (other than trading stock) the company or trust acquired on or after 20 September 1985 has a market value of at least 75% of its net value, a capital gain can arise on the part of the price reasonably attributable to the growth in that later property. This is called CGT event K6. Exceptions apply, including for some listed entities.
Applying this test needs market values for the entity's assets just before the sale, not their book values.
A business that is no longer the same business
Goodwill of a business is a single CGT asset. The ATO's ruling on goodwill says growth in the goodwill of the same business does not create a new asset. But a new business, even one run alongside the old one, has its own goodwill, acquired when it began. If a business changes so much that it is in substance a different business, part or all of the goodwill may not be pre-CGT. See goodwill valuation for CGT.
Other times a value is needed
- Inheritance. Assets a beneficiary inherits from someone who held them as pre-CGT assets generally take a cost base worked out from their market value on the day the person died. See deceased estate valuations.
- 30 June 2027. A separate rule in the new law treats assets that are still pre-CGT on 30 June 2027 as sold and bought back at that date; the gain on that deemed sale is disregarded. A value at that date may be useful, but is not required by law, because an apportioning method is also allowed. See the 30 June 2027 valuation.
What the valuation report covers for this purpose
The report identifies the asset or interest, the owner and the valuation date your adviser has fixed. It explains the standard of value (market value), the evidence relied on and its dates, the method, the earnings and adjustments, and any separate values needed, such as the goodwill alone or the entity's assets acquired before and after 20 September 1985. Assumptions and limitations are stated, and it is signed by the valuer responsible. We follow the APES 225 guidelines on valuation services.
What we need from you
- your adviser's note of what is to be valued and at what date
- the share register, unit register or trust records showing ownership over time
- financial statements around the valuation date
- for a K6 question, a list of the entity's assets with their acquisition dates
- a short history of the business: when it started, major changes, new locations or activities
Older records can be hard to find. Tell us early what is missing so we can plan around it.
Get a fixed fee
The fee is fixed by the annual revenue of the business, starting at $1,495 + GST for revenue under $1 million. Where values are needed at more than one date, ask us for a fixed quote before we start.
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.