A fast-moving area. The headline reforms have passed Parliament, but several details are still being finalised through Treasury consultation and supporting rules. Nothing here is advice — speak to a registered tax agent before acting, and don’t restructure on the strength of a summary.
In June 2026 Parliament passed the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and its companion rates bill — the biggest overhaul of Australia’s capital gains tax system since the 50% discount was introduced in 1999. For business owners thinking about an exit, the headlines sound alarming. The reassuring news: the reliefs that do the heavy lifting on most small business sales have survived.
What stays the same: the small business CGT concessions
This is the part that matters most to exiting owners. The four small business CGT concessions — the 15-year exemption, the 50% active asset reduction, the retirement exemption and the rollover — have all been retained. In fact, the Government has said it will make the 50% active asset reduction broader and more generous by lifting the turnover threshold, so more businesses can access it. If you qualify, the concessions that can reduce — or eliminate — tax on the sale of your business are still there. Our guide to the small business CGT concessions explains how they work.
What changed: the 50% discount becomes indexation
For capital gains accruing on or after 1 July 2027, the flat 50% CGT discount for individuals, trusts and partnerships is replaced by cost-base indexation — the cost base is adjusted for inflation (CPI) so you’re taxed only on the “real” gain, provided the asset has been held at least 12 months. A new minimum 30% rate applies to capital gains, with some exemptions. The 50% discount is retained for new residential housing.
The catch for business goodwill
Indexation only helps where you have a real cost base to index. Much of a business’s value is internally generated goodwill — reputation, customers, systems built up over years — which typically has little or no cost base. For gains that aren’t sheltered by the small business concessions, indexation may give far less relief than the old 50% discount did. That makes qualifying for the small business concessions, and planning the structure of your sale, more important than ever.
Pre-1985 businesses lose their shield
Assets acquired before 20 September 1985 have been outside the CGT net for four decades. From 1 July 2027 those pre-CGT assets are brought in. If you’ve held your business or its premises since before 1985, this is a material change — one to raise with your accountant well before you sell.
If your business is held in a trust
Many businesses are run through discretionary (family) trusts. A separate minimum 30% tax on discretionary trust income is scheduled from 1 July 2028, with testamentary trusts exempt. To help owners adjust, rollover relief is available for three years from 1 July 2027 to restructure out of a discretionary trust into another entity, such as a company or fixed trust. If a trust holds your business, this is worth reviewing as part of your exit plan.
What it means for your exit — and what to do now
For most small business owners who qualify for the concessions, the core picture is unchanged — and one concession is improving. The owners most affected are those whose gains fall outside the small business concessions, those holding pre-1985 assets, and those in trust structures. With the changes commencing 1 July 2027, there is a genuine planning window:
• Confirm whether you qualify for the small business CGT concessions, and what the broader active-asset reduction will mean for you.
• If you hold the business in a trust, review whether the rollover relief window suits a restructure.
• If you’ve held assets since before 1985, get advice on the transition.
• Factor the 1 July 2027 commencement into your exit timeline — but don’t rush a sale or restructure on a summary alone.
This guide is general information only and does not take account of your personal circumstances. It is not financial, tax or legal advice. Speak to a qualified adviser before acting.