Government Revises Proposed Trust & CGT Tax Changes: What Business Owners Need To Know 

Following significant feedback from business groups, accountants and tax professionals, the Federal Government has announced several changes to its proposed Capital Gains Tax (CGT) and trust taxation reforms. 

While the broader reforms remain on the table, the latest announcement softens some of the original proposals and provides greater certainty for small businesses, families and startup investors. 

Here’s what has changed. 

Small Business CGT Concession Expanded 

One of the most significant changes affects the small business Capital Gains Tax concessions. 

The Government has announced that from 1 July 2027, the turnover threshold for accessing the 50% active asset reduction will increase from $2 million to $10 million.  

This means many more business owners could remain eligible for valuable tax concessions when selling or restructuring their business. 

For many Australian businesses, this change preserves an important tax planning opportunity that may otherwise have been lost under the original proposal. 

• Explore the four current concessions available to small businesses here. 
• To apply the small business 50% active asset reduction, you must meet the basic eligibility conditions common to all four small business CGT concessions.

Testamentary Trusts Excluded from Proposed Trust Tax Changes 

The Government has also proposed that testamentary trusts, trusts established through a person’s Will, be exempt from the proposed 30% minimum tax on discretionary trusts, set to take effect from 1 July 2028. 

The original proposal raised concerns among estate planning professionals that families using testamentary trusts could face unintended tax consequences following the death of a loved one. 

The exemption provides greater certainty for succession planning and estate administration. 

New CGT Incentives Proposed for Startups 

To encourage innovation and investment, the Government has announced it will consult on a new Innovative Business CGT Concession. 

While the detail is still being developed, eligible founders, early-stage investors and employee shareholders may be able to choose between: 

• A 50% Capital Gains Tax discount; or 
• The proposed inflation-indexed CGT system. 

Further consultation is expected before these measures are introduced. 

Greater Certainty Through Legislation 

Rather than leaving key details to future regulations, the Government has committed to placing more of the framework directly into legislation. 

This should provide greater certainty for taxpayers and their advisers when planning business transactions and investments. 

What Hasn’t Changed? 

While these announcements are significant, the Government has not abandoned its broader tax reform agenda. 

The proposed overhaul of the Capital Gains Tax system remains under consideration. This includes: 

• Replacing the current 50% CGT discount for future assets with an indexation-based approach, and  
• Introducing a 30% minimum tax rate.

Importantly, these reforms are not yet law. Legislation will still need to pass Parliament before any changes take effect, and further amendments may occur during that process. 

What Should Business Owners Do? 

Although there is no immediate action required, this is an important reminder to regularly review your business structure and long-term succession plans. 

If you’re considering selling your business, restructuring your affairs, or reviewing your estate planning arrangements, the proposed changes could affect your future tax outcomes. 

Seeking advice early can help you understand the potential implications and ensure you’re well positioned as the legislation develops. 

Need Advice? 

Tax reform can have far-reaching consequences for business owners, investors and families. 

At Aintree Group, our accounting, legal and wealth advisers work together to help you understand how proposed legislative changes may affect your broader financial position and develop strategies that support your long-term goals. 

If you’d like to discuss how these proposed reforms may apply to your circumstances, contact our team today. 

This is general advice only and has not been prepared with your individual situation or needs in mind. For personalised advice, we highly recommend that you seek professional guidance from a qualified adviser.