AAT rejects taxpayer’s bid to discount the market value of shares

The AAT decides against discounting the value of shares sold by a taxpayer by the value of non-competition clauses in the sale of a private company, resulting in the taxpayer failing the MNAVT.

A taxpayer has been ruled to have failed maximum net asset value test (MNAVT) on the basis that the market value of shares they sold in a private company could not be reduced by the value of non-competition clauses included in the sale contract.As a result, the taxpayer was unable to access the Small Business CGT (SB CGT) concessions as their assets were valued at over $6 million immediately before the relevant CGT event, triggering failure of the maximum net asset value test. The factsT...

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Authors: Clive Bird, Christina Levin

Published Date: 24 January 2020