New CGT Rules From 1 July 2027: Why Business Owners Should Consider a 30 June 2027 Valuation

Australia's capital gains tax rules are changing from 1 July 2027, and for owners of private businesses, 30 June 2027 could become an important valuation date.

The changes are now law. The reforms passed both Houses of Parliament and received royal assent in June 2026 (Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and the related Income Tax Rates Amendment Act). From 1 July 2027, the existing 50% CGT discount will generally be replaced with cost base indexation, together with a 30% minimum tax rate on certain capital gains.

Importantly for business owners, the Government has confirmed that business value built up before 1 July 2027 retains the existing CGT treatment, even where the business is sold after that date.

That raises an important question: what was your business actually worth at 30 June 2027? 

A note on business structure

The current 50% CGT discount has never applied to companies; it is available only to individuals, trusts and partnerships. This means the reform does not directly change how a company is taxed on the sale of its own business assets.

Where it does matter is at the shareholder level. If you hold your business through a private company and you (personally, or via a trust) eventually sell your shares, the discount changes apply to that share sale, and the value of your shareholding at 30 June 2027 is what may need to be established. Business owners should clarify with their adviser exactly which entity in their structure is affected before assuming a valuation is, or isn't, relevant to them.

Why the 30 June 2027 value matters

For listed shares, establishing market value at a particular date is usually relatively straightforward. For a privately owned business, there is no quoted market price.

The value may depend on profitability, maintainable earnings, goodwill, industry conditions, business risks, key person dependency, assets, liabilities and many other factors.

Under the new rules, assets held at the transition date are generally treated as if disposed of and reacquired just before 1 July 2027, splitting any eventual gain into a pre-reform portion (taxed under the old rules) and a post-reform portion (taxed under the new rules). That makes the value of an asset, including a private business interest, precisely at 30 June 2027 the reference point the law itself relies on, not simply useful supporting evidence for a sale that happens years later.

Trying to reconstruct that value five or ten years later could be considerably more difficult.

Don't rely on an unsupported valuation

Where potentially significant tax is involved, a business valuation needs to be capable of standing up to scrutiny.

The ATO already provides guidance on market valuations for tax purposes and expects valuations to be objective, supportable and based on appropriate evidence and recognised valuation principles.

A simple estimate from the business owner, an unsupported earnings multiple or a valuation prepared without appropriate expertise may create problems if the valuation is later reviewed by the ATO.

Ultimately, you do not want to discover years after the event that a valuation affecting a substantial CGT liability cannot be properly supported or is questioned by the ATO.

Further ATO guidance specifically addressing the practical operation of the new CGT rules may also emerge as we approach 1 July 2027.

Why use a CA ANZ Business Valuation Specialist?

Dolman Bateman Forensic undertakes independent business valuations through appropriately qualified and experienced valuation professionals, including CA ANZ Business Valuation Specialists.

CA ANZ's Business Valuation Specialist designation requires members to satisfy relevant education and practical experience requirements. Specialists also have ongoing professional development obligations specifically relating to business valuation.

While the ATO does not require a particular professional designation, engaging an appropriately qualified and experienced specialist can help ensure the valuation methodology, assumptions and supporting evidence are properly documented.

Should you obtain a valuation?

Not every business owner will necessarily require a formal valuation at 30 June 2027. The appropriate approach will depend on the business, ownership structure, potential future capital gain and application of the CGT rules and concessions.

However, owners of valuable private companies and business interests should discuss the issue with their tax adviser before 30 June 2027, rather than trying to reconstruct the evidence years later.

Dolman Bateman Forensic can assist with independent business valuations prepared with the supporting analysis and documentation needed for significant taxation matters.

Prepare for 30 June 2027

If you own a private business or shares in a private company, now is the time to understand whether a 30 June 2027 valuation should form part of your tax planning.

Speak with Dolman Bateman Forensic about preparing an independent business valuation at this important transition date.

Discuss Your 30 June 2027 Valuation