- A transfer to a related entity, such as a family trust or company you control, is generally a CGT event.
- Where the parties are not dealing at arm's length and the price differs from market value, market value can be used instead.
- The new owner's cost base usually starts at market value in the same situations.
- A rollover may defer the tax, but values are often still needed for duty, records and the deal itself.
- Your accountant or tax adviser decides the tax treatment. We value the business or interest.
Common related party transfers
Business owners move assets between their own entities for many reasons: bringing in a company, moving shares into a family trust, separating the trading business from its assets, or preparing for a sale. Typical examples:
- a sole trader or partnership selling the business to a new company
- shares in the family company moving from a person to the family trust
- a business moving from a discretionary trust to a company, or the reverse
- goodwill or intellectual property moving to a separate entity
- units in a unit trust moving between family members or their entities
Each of these is generally a CGT event for the entity or person giving up the asset.
Why the price on the contract may not be the number that counts
Between strangers, the agreed price is usually the best evidence of value. Between related parties, it may not be. The tax law deals with this through the market value substitution rule.
In general terms:
- For the seller. If you receive nothing, you are treated as receiving market value. If you receive more or less than market value and you and the buyer are not dealing at arm's length, market value can be used instead of the price.
- For the buyer. Where the buyer pays nothing, or does not deal at arm's length with the seller, the first element of their cost base is generally the market value of the asset.
"Arm's length" means each party acts independently and neither has influence or control over the other in the deal. When you control both entities, or they belong to the same family group, they are often not at arm's length.
So a transfer at book value, at a round number, or for a loan account entry, can still be taxed by reference to market value. Whether the rule applies to your transfer is for your accountant or tax adviser.
Rollovers, duty and GST
There are rollovers that can defer CGT on some transfers between related entities, including the small business restructure rollover for genuine restructures with no change in who ultimately owns the business. A rollover changes the tax timing. It does not make other questions go away:
- State duty is set by each state and territory and is a separate question. It may be worked out by reference to value, and the rules differ from place to place.
- GST is separate too, for example whether a transfer can be made as a going concern.
- Loan accounts and records. Where the new entity owes the old one a price, that price needs a basis.
We cover the rollover side on our restructure and rollover page.
SMSFs, in general terms
A self managed super fund is a special case. Super law limits what a fund can acquire from members and related parties, and many business assets and private company shares cannot be acquired from a related party at all. Speak to your SMSF adviser first. Where an acquisition is allowed, the fund generally needs to deal at market value, and its auditor will look for support.
What is being valued
Depending on the transfer, the value may be needed for:
- the whole business, including goodwill, plant, stock and other assets
- a parcel of shares or units, taking into account control, rights and marketability
- goodwill or intellectual property on its own
- a partnership interest
If the business is moving as a going concern, we can show goodwill and the major assets separately so your accountant can allocate the price.
What the valuation report covers for this purpose
For a related party transfer, the Professional Valuation Report sets out:
- the asset or interest transferred, the seller and the buyer
- the transfer date as the valuation date
- market value as the standard of value, on the basis that the parties deal at arm's length
- the method, earnings, adjustments and evidence relied on
- where asked, separate values for goodwill and other major assets
- assumptions and limitations, signed by the valuer responsible
The ATO decides for itself whether to accept a valuation. Its guidance says acceptability usually depends on the process followed rather than who conducted it, though some tax purposes require a particular type of valuer. Your adviser tells you if yours does.
What we need from you
- A short note from your accountant on the transfer, the entities and the date
- Financial statements and tax returns for the last three years
- Management accounts up to the transfer date
- The constitution, trust deed or partnership agreement for each entity
- An asset list, leases and key contracts
- Any draft sale agreement or price already discussed
Get a fixed fee
Our fee is fixed by the annual revenue of the business, starting at $1,495 + GST for revenue under $1 million. Revenue of $10 million or more is a custom fixed-fee quote. Use the price tool below 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.