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Australia: Market value of shares for capital gains tax purposes must include control premium (Federal Court decision)

Market value for capital gains tax (CGT) purposes must reflect real-world characteristics of large shareholding.

May 14, 2026

The Federal Court on May 11, 2026, held in Shell Energy Holdings Australia Limited v Commissioner of Taxation [2026] FCA 577 that the market value of a 34.27% shareholding—for purposes of determining the basis of the shares upon becoming assets subject to capital gains tax (CGT) on January 20, 1997—must include an 18% premium above the listed Australian Securities Exchange (ASX) trading price on that date, to account for the significant influence associated with such a large minority interest.

The court found the tax authority’s position to be "commercially implausible" and rejected the argument that comparable transaction evidence involved an impermissible use of hindsight, stating that disregarding such evidence "defies common sense."


For more information, contact a KPMG tax professional in Australia:

James Alsop | jamesalsop@kpmg.com.au

Steve Plant | ssplant@kpmg.com.au

Allan Szostak | aszostak1@kpmg.com.au

Alexandra Macolino | amacolino@kpmg.com.au

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