The $6 million maximum net asset value test is an important eligibility requirement for Australia’s small business CGT concessions. To satisfy the test, the combined net market value of the relevant CGT assets must not exceed $6 million immediately before the CGT event.
This is not simply a calculation based on the sale price of the business or the net assets recorded in its financial statements. The assessment may include the market value of assets owned by the taxpayer, connected entities and certain affiliates, less permitted related liabilities. Relevant assets can include business goodwill, property, plant and equipment, investments, cash, intellectual property and interests in other entities.
A professional valuation is particularly important because internally generated goodwill is rarely recorded on the balance sheet. Book values and tax written-down values may also differ significantly from market value. Where the calculated net asset value is close to $6 million, even a relatively small valuation adjustment may determine whether the taxpayer qualifies for valuable CGT concessions.
BRV provides independent and supportable market valuations of businesses, companies, shares, goodwill and intellectual property for the maximum net asset value test. Our reports clearly explain the valuation methodology, assumptions, maintainable earnings, applicable valuation multiples and treatment of non-operating assets.
With business valuation experience dating back to 1986, Lee Goldstein prepares clear and defensible valuation reports for taxation, restructuring, succession planning and business sale purposes throughout Australia.
The taxpayer’s accountant or taxation adviser should determine which entities, assets and liabilities are legally included in the statutory calculation. BRV provides the independent market valuation evidence required to support that assessment.
If you require a business valuation for the $6 million maximum net asset value test or the small business CGT concessions, contact BRV on 0414 252 032.
The principle of brv Lee Goldstein has been involved in Business Valuations and sale of Businesses since 1985. He holds a double major degree in Accounting and Finance, a Diploma in Forensic Accounting, a Graduate Diploma in Valuation (property), an Advanced Certificate of Business and an Advanced International Certificate in Intellectual Property. Lee has conducted numerous intellectual property valuations covering a diverse range of industries and is often called upon to provide expert testimony in judicial matters. He has valued businesses and intellectual property worth over $3.2 billion.