Capital Gains Tax and Discretionary Trusts Reform: Small business explainer
Date
18 June 2026
Australian Government
2026
Capital Gains Tax and Discretionary Trusts Reform: Small business explainer 1.63 MB
Your CGT safety nets are locked in
The 4 small business capital gains tax (CGT) concessions are staying. If you meet the eligibility criteria, you can still reduce or completely remove tax on any gains when you:
In addition, the turnover threshold for the 50 per cent active asset reduction is increasing from $2 million to $10 million from 1 July 2027. The most recent data shows that:
The new CGT rules don’t start until 1 July 2027 and are entirely prospective. Any business value you build up before this date keeps the old 50 per cent discount rule, no matter when you sell in the future.
From 1 July 2027, the flat 50 per cent CGT discount is being replaced by a new discount for inflation and a 30 per cent minimum tax rate on real gains. This ensures you only pay tax on your real capital gains, because your cost base at that date is indexed for inflation.
For the minority of small businesses that use a discretionary trust, a new 30 per cent minimum tax will apply. It is expected that over 90 per cent of Australia’s 2.7 million active small businesses will not be affected in any given year.