Does the 30 June 2027 rule apply to a sole trader?

Why the rule reaches sole traders

A sole trader is not a separate legal entity. You own the business and its assets yourself, so for tax purposes you are the taxpayer who holds them. The transitional rule in the 2026 tax reform law applies to Australian resident individuals and to many trusts, which means it reaches the CGT assets of a sole trader business in the same way it reaches other assets you hold personally.

That is the key difference from a business run through a company. A company owns its own assets and could never use the 50% CGT discount, so the 30 June 2027 rule works differently there. As a sole trader, the rule generally applies to a business CGT asset when:

• you are an Australian resident (foreign or temporary residence since 8 May 2012 can rule you out)
• you acquired the asset before 1 July 2027 and still held it at the end of 30 June 2027
• you later sell it, or another CGT event happens to it, on or after 1 July 2027

What is actually being valued

The rule works asset by asset, not on "the business" as one thing. For many sole traders the main business CGT asset is goodwill: the value of the business beyond its separately identifiable assets, built on its customers, reputation, systems and location. Trading stock and most depreciating equipment used in the business are generally dealt with under other tax rules, so your accountant will confirm which assets are in scope.

Sole trader goodwill often leans heavily on the owner: your relationships, your skills and your hours. A careful valuation asks how much of the profit would stay with the business if someone else ran it, after allowing a fair wage for the work you do. That can make goodwill worth less than an owner expects, or more where good systems and a stable customer base carry the business.

Independent Business Valuation values businesses and business interests. If you own your business premises personally, that is a separate asset with its own rules, and Independent Business Valuation does not value property.

Is a 30 June 2027 valuation worth it for a sole trader?

Nothing is payable on 30 June 2027 because of this rule. The gain to that date is held over until you later sell, and the 50% discount can still apply to that earlier portion if the usual conditions are met. When you sell, the default starting point is the market value just before 1 July 2027. You may instead be able to choose an apportioning method once one is made, and that choice is made with your tax return for the year of the sale. As at October 2026 the method was still a draft.

Not every sole trader needs a valuation. One tends to be most useful where:

• you expect to sell, retire or hand over the business within a few years
• the business has grown strongly, so the split between gains before and after 1 July 2027 matters
• you plan to move the business into a company or trust, where market value questions often come up anyway
• you want a documented figure built from records to 30 June 2027, rather than a reconstruction years later

If the business is small and you plan to keep running it for many years, your tax adviser may decide an apportioning method, once one is made, is enough. That is their call. Independent Business Valuation does not give tax advice.

Timing and fees

A valuation as at 30 June 2027 is prepared after that date, once your records to 30 June 2027 are available. You can book your place now. Until then, the most useful step is getting your bookkeeping, BAS and tax returns in order with your accountant.

The fixed fee applies once we confirm the interest, purpose, structure and records fit the fixed-fee scope. Anything outside it is quoted in writing before we start. Fixed fee, confirmed in writing before we start. No hourly billing and no surprises.