Private Company Share Valuations for the 2027 CGT Changes

Last reviewed: 17 September 2026.

Private company shares rarely have a quoted price that can simply be looked up at year end. Their value needs to be considered in the context of the company’s business, financial position and the rights attached to the particular shares. The 2027 CGT transition makes that distinction relevant for owners whose interests fall within the new rules.

A useful valuation instruction therefore starts with “these shares, held by this owner, for this purpose and date”, rather than only “what is the business worth?”

Confirm whose asset is being valued

The transition provisions distinguish Australian resident individuals and trusts and refer to market value just before 1 July 2027, subject to their conditions and an alternative apportioning method. The shareholder’s interest must be considered separately from assets held by the company. See Schedule 1 of the enacted legislation.

Your accountant should confirm the relevant taxpayer and asset before the assignment begins. Shares held personally, shares held through a family trust, and a business owned directly by a company should not be treated as interchangeable. Acquisition history, residency and any previous restructure also belong in that discussion.

For the wider date and timing questions, read our overview of 30 June 2027 business valuations and CGT changes.

Identify the actual shareholding

Record the company name, share class, number of shares and percentage held at the valuation date. Then examine the constitution and any shareholder agreement. The title “ordinary shares” does not remove the need to understand the governing documents.

The review should consider voting powers, dividend rights, transfer restrictions and rights on a sale or winding up. Options, preference shares and other arrangements may affect what remains available to ordinary shareholders. Shareholder loans should also be identified separately rather than silently included in the share price.

For example, a 20% holding cannot always be assessed by taking a headline whole-company figure and multiplying it by 20%. First establish what that company figure represents and whether the particular holding has rights or restrictions that require further analysis. Any adjustment needs reasons and evidence; it should not be a standard percentage applied automatically.

Connect business value to shareholder value

A trading business may be analysed by reference to its earnings or cash flows. That operating value then needs to be reconciled to the value attributable to shareholders, considering the financial position and the assumptions used in the analysis.

Debt, cash, non-operating assets and other relevant claims can affect this reconciliation. Consistency matters: an item already reflected in the earnings or cash-flow assessment should not be counted again without justification. The report should explain how the conclusion for the business connects to the conclusion for the shares.

Our enterprise value versus equity value worked example explains that distinction. It is particularly useful when a transaction headline or an informal industry multiple is being used as a reference point.

Explain the earnings behind the valuation

Owner-operated businesses often contain costs or arrangements that require explanation. These might include remuneration for several family members, a one-off dispute expense, unusual customer receipts or rent paid to a related entity. Each item should be assessed in context.

Removing an owner’s salary entirely, for example, can overlook the cost of replacing the work they perform. Likewise, an expense labelled “one-off” may recur in a different form. Provide contracts, payroll information and supporting transactions so the analysis can distinguish a defensible adjustment from an optimistic assumption.

See our discussion of owner salaries and exceptional expenses for practical examples.

Preserve evidence of conditions at the valuation date

Keep the accounts, forecasts and board papers available around 30 June 2027, together with material contracts and explanations of trading changes. Record when forecasts were prepared and why they were revised. Retain relevant offers or share transactions with their terms, rather than just their headline price.

The ATO’s market valuation guidance stresses credible evidence, an appropriate methodology and clear identification of the interest being valued. A later report should explain its historical valuation date and distinguish information relevant at that date from subsequent developments.

Choose the scope before commissioning the report

Discuss the report’s intended use, information gaps and available alternatives with your advisers. Treasury’s detailed apportioning method remains published as draft material at this review date; see the official consultation. An independent valuation should not be presented as compulsory for every private shareholder.

Evident can discuss a defined business or share valuation assignment with you and your accountant. Visit our 2027 CGT valuation page, gather the documents needed for a business valuation, or book a free 15-minute consultation.

General information only, current at the review date. Tax treatment and eligibility require advice on your circumstances. A valuation does not guarantee a tax outcome or ATO acceptance.

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