- For a sale under a contract, the CGT event generally happens when the contract is made, not at settlement.
- The small business CGT concessions use market values in some tests, measured just before that event.
- The price usually has to be split between goodwill, plant, stock and other assets, because each is treated differently for tax.
- Sale price and market value can differ: a buyer may pay for synergies, or the deal may include earnouts, restraints or vendor finance.
- Your accountant or tax adviser decides the tax treatment. We provide independent market values.
Where values come into a sale
Selling a business to an unrelated buyer is the most common CGT event for an owner. The price you agree is generally your capital proceeds. So why would a valuation matter? There are three main reasons.
- The small business CGT concessions. Some of the tests use market values, measured just before the CGT event.
- Splitting the price. A single price for a business usually has to be divided between goodwill and the other assets.
- Price and market value are not always the same. Where the deal is unusual, or the buyer is related to you, market value can matter in its own right.
Values for the small business concessions
The four small business CGT concessions can reduce, disregard or defer the gain on selling business assets. To use them, you first need to meet the basic conditions. Two of the tests your accountant may apply run on market value:
- The maximum net asset value test. If your aggregated turnover is not under $2 million, the net value of the assets of you and certain related entities must not be more than $6 million just before the CGT event. Goodwill counts at market value. See our maximum net asset value test page.
- The 80% test for share sales. If you are selling shares or trust units, the market value of the entity's active assets (with cash and financial instruments that are part of the business) must make up at least 80% of the market value of all its assets.
For a sale under a contract, the CGT event generally happens when the contract is made, not at settlement. That is the date these tests look at. A value at that date is easier to support than one worked out after the money has been spent.
From the income year that includes 1 July 2027, the 50% active asset reduction needs only aggregated turnover under $10 million; the other concessions keep the $2 million test. Your accountant decides whether you qualify. More on our small business concessions page.
Splitting the price between assets
An asset sale is really a bundle of sales. Each part can be treated differently:
- Goodwill is usually a CGT asset, and often an active asset for the small business concessions.
- Plant and equipment is generally dealt with under the depreciation rules, through a balancing adjustment, rather than as a capital gain.
- Trading stock has its own rules. When stock goes with the whole business, the tax law can use its market value rather than the figure in the contract.
- Other intangibles, such as a brand, software, licences or customer lists, may be separate assets.
The split affects the seller's tax and the buyer's future deductions, so the two parties do not always want the same thing. A reasonable split, backed by market values for each group of assets, is easier to defend than a figure picked to suit one side. We can value goodwill and each major asset group separately for this purpose.
Why the sale price and market value can differ
Market value assumes a hypothetical willing but not anxious buyer and seller, acting at arm's length, with reasonable knowledge of the business. A real sale can land somewhere else:
- A special buyer. A competitor or supplier may pay more than market value because of savings only they can make.
- A forced or quick sale. Selling under time pressure, or to the only party available, can produce less.
- Deal terms. Earnouts, vendor finance, restraints, consulting arrangements and retained working capital all change what the headline price means.
- A related buyer. Selling to family or to your own entities can bring in the market value substitution rule.
None of this means the price is wrong. It means a market value at the relevant date, where needed, is a separate piece of evidence, and the report explains how any offer or sale price was considered.
What the valuation report covers for this purpose
For a sale, the Professional Valuation Report sets out:
- the business, shares or interest being sold, and the owner
- the valuation date, usually just before the CGT event
- market value as the standard of value
- where asked, separate values for goodwill and major asset groups
- how any offer, heads of agreement or sale price was considered
- the method, earnings, adjustments, evidence, 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
- Financial statements and tax returns for the last three years
- Management accounts up to the valuation date
- The sale contract, heads of agreement or offers received
- An asset register and stock figures at the date
- Leases, key contracts and a customer summary
- A note from your accountant on what the values are for
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.