What has been enacted?
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026. Its CGT measures generally apply from 1 July 2027. For affected individuals and trusts, the general 50% discount gives way to indexation and a 30% minimum-tax framework for post-transition gains, subject to exceptions and transitional rules. Companies already lacked the general discount; they should not be modelled as though they previously received it.
Commencement of amending provisions and the date on which a tax rule applies are different. Check the consolidated legislation, application provisions and later amendments for the transaction. This guide concerns business disposals, not the separate negative-gearing rules.
Existing assets: a split calculation
Subdivision 112-E contains deemed-sale and reacquisition rules around 30 June/1 July 2027 for affected assets. The pre-transition gain or loss is generally deferred until a later realisation event. Market value at the transition, or an available statutory apportionment method, separates that amount from subsequent growth. A deemed sale is a tax calculation mechanism, not a requirement to transfer legal title or pay tax immediately on every asset.
For business owners, this makes reliable records of goodwill, ownership, historic cost and transition value useful. Decide whether a valuation is needed before the evidence becomes harder to obtain. The correct method can depend on the taxpayer, asset and applicable rules; this guide does not assume one valuation method is compulsory for every business.
Pre-CGT assets need separate attention
Do not assume that an asset acquired before 20 September 1985 remains outside CGT for all future growth. The reform includes specific pre-CGT transition rules. Their interaction with shares, underlying assets and CGT event K6 can be materially different from a simple post-CGT asset sale. Obtain a separate calculation before relying on the historic acquisition date.
The small-business concessions remain relevant
The reform retains Division 152. For the 50% active asset reduction, the special $2 million turnover restriction is disregarded, allowing the ordinary small-business entity threshold of aggregated turnover below $10 million to be relevant. That expansion does not generally give a business between $2 million and $10 million turnover access to every other Division 152 concession. The maximum net asset value and other gateways, active-asset conditions and additional share-sale tests still require attention.
Swipe or scroll sideways to view all columns.
| Seller scenario | Decision to model |
|---|---|
| Already qualifies under existing gateways | Compare available concessions, contribution/payment conditions and transition treatment. A qualifying 15-year exemption may be more significant than the general discount change. |
| Turnover between $2m and $10m; does not satisfy the $6m net-asset gateway | Test whether the expanded active asset reduction is available after the change. Do not assume retirement exemption or rollover eligibility follows. |
| No small-business concessions | Model pre-transition deferred gains and post-transition indexed gains, the applicable minimum tax and other income. |
| Company asset sale | Model company tax and the later extraction of proceeds separately; do not apply an individual’s general discount. |
Contract date is not completion date
For a disposal under a contract, CGT event A1 generally occurs when the contract is entered into. A June contract completed in July is not automatically a July disposal. Conditions precedent must be analysed: a condition to formation is different from a condition affecting performance of an already binding contract.
Have heads of agreement, options, variations and earnouts reviewed together. A genuinely qualifying look-through earnout can have different treatment from an independent right to additional consideration. Artificial dates and casual references to a “conditional contract” are not a safe timing strategy.
What remains a planning watch-item?
The separate announced 30% minimum tax on discretionary trusts from 1 July 2028 was described as not yet law in the ATO material checked for this guide. It should be modelled as a proposal, not combined with enacted CGT provisions as though they are one rule. Detailed ATO guidance may also develop on applying the transition to particular business structures; an unresolved factual or interpretive issue needs tailored advice.
Do not panic-sell solely for a tax date
A lower sale price, lost growth, financing costs or a rushed due-diligence process can outweigh a tax difference. Compare credible offers and after-tax proceeds under both dates, including the time value of money, adviser costs and execution risk. Ask for a written assumptions list and a sensitivity analysis rather than a single headline saving.
- Identify the legal seller and assets being sold.
- Test each concession independently.
- Confirm the CGT event date under the actual documents.
- Establish historic and transition values.
- Model tax at entity and owner level.
- Compare the result with commercial alternatives.
Frequently asked questions
Should every business owner sell before July 2027?
No. Concessions, transition rules, ownership structure and the commercial price can change the result. Compare the actual alternatives.
Will completing in July put a June contract into the new rules?
Not necessarily. CGT event A1 generally follows contract entry for a contractual disposal. The legal effect of conditions and other documents must be checked.
Does the higher turnover gateway unlock all CGT concessions?
No. The expansion is directed to the 50% active asset reduction. Other concessions retain their own gateway and additional conditions.
Official sources
- Treasury Laws Amendment (Tax Reform No. 1) Act 2026
- Income Tax Assessment Act 1997 — Divisions 104, 115 and 152
- ATO — Enacted negative gearing and CGT reform
- ATO — Discretionary trust minimum-tax proposal