If you’re thinking about selling your business, an investment property, shares or another significant asset in the next few years, there’s an important tax change you need to have on your radar.
From 1 July 2027, the Australian Government is changing the way the Capital Gains Tax (CGT) discount works for individuals and trusts.
For business owners in particular, this isn’t simply another tax update.
It could influence decisions about when you sell your business, how you plan your exit, which small business CGT concessions may be available and what happens to the wealth you’ve spent years building.
And while July 2027 might sound a long way away, when it comes to selling a business or significant asset, good planning often starts years — not weeks — before the transaction.
So, what exactly is changing?
First, a quick refresher: what is Capital Gains Tax?
Capital Gains Tax generally comes into play when you dispose of an asset and make a capital gain.
Depending on your circumstances, that could include selling:
- an investment property
- shares or other investments
- business assets
- commercial property
- your interest in a business
- other assets subject to CGT.
CGT isn’t actually a separate tax. Generally, your net capital gain forms part of your assessable income and is taxed accordingly.
You can read more about Capital Gains Tax on the ATO website.
What’s changing from 1 July 2027?
Currently, eligible Australian resident individuals and trusts can generally access a 50% CGT discount on capital gains from assets held for at least 12 months, subject to the relevant rules.
The Government has announced significant reforms to this system.
From 1 July 2027, the existing CGT discount arrangements are set to change, with the Government moving to a system that takes inflation into account and introduces a 30% minimum tax rate on real capital gains.
In simple terms, rather than relying on the existing 50% discount in the same way, the new system is intended to tax the gain above inflation under the new rules.
You can read the Government’s overview of the 2026–27 Budget tax reforms on the Treasury website.
What if I already own the asset?
This is one of the most important parts of the announcement.
If you’ve already spent years building the value of your business, property or investments, it doesn’t mean the entire gain suddenly becomes subject to the new rules on 1 July 2027.
The Government has announced that the reforms will be prospective.
Broadly, gains accrued up to 1 July 2027 will continue to receive the existing CGT treatment, while gains accruing after that date will fall under the new arrangements.
Treasury has published further information about how the CGT reforms are intended to operate for small businesses.
The practical takeaway?
Good records are going to matter.
If you own significant assets that have increased substantially in value, understanding their position as we approach 1 July 2027 could become an important part of your future tax planning.
Does this mean I should sell before 1 July 2027?
Not necessarily.
And this is exactly the kind of decision we don’t want business owners making based purely on tax.
You might see headlines about the CGT changes and think:
“Should I sell now before the rules change?”
But tax is only one part of a much bigger decision.
If we’re talking about selling a business you’ve spent 10, 15 or 20 years building, there are far more questions to consider.
Is the business actually ready for sale?
Is now the right time commercially?
What is the business worth?
Could another few years of growth significantly increase that value?
What will you do after you sell?
How much money do you actually need?
What concessions could you qualify for?
And what does the sale mean for your family’s long-term financial position?
Saving tax on a poorly timed sale isn’t necessarily a good outcome.
The goal isn’t simply to minimise tax. The goal is to make the best overall financial decision.
There’s good news for small business owners
While the broader CGT system is changing, the Government has confirmed that the existing small business CGT concessions are being retained.
There are currently four small business CGT concessions:
- the 15-year exemption
- the 50% active asset reduction
- the retirement exemption
- the small business rollover.
Depending on your circumstances, these concessions can significantly reduce, defer or, in some cases, eliminate a capital gain arising from the sale of eligible business assets.
You can learn more about the small business CGT concessions on the ATO website.
But these concessions have eligibility requirements.
You don’t automatically qualify simply because you own a small business.
That’s why understanding them before you start negotiating a sale can be incredibly important.
The active asset reduction is also being expanded
There’s another change that could be particularly relevant to growing businesses.
From 1 July 2027, the Government has announced that the turnover threshold associated with the small business 50% active asset reduction will increase from $2 million to $10 million.
That could bring more businesses within the turnover threshold for this particular concession.
However, turnover is only one part of determining eligibility.
The asset itself, your business structure, ownership arrangements and other requirements can all affect whether a concession applies.
This is why CGT planning shouldn’t start after you’ve already signed a contract.
Planning to sell your business one day? Start planning earlier than you think.
One of the biggest misconceptions around business succession is that you start planning when you’re ready to sell.
Ideally, you don’t.
A good exit strategy can take years to build.
If you eventually want your business to fund your retirement or next stage of life, we need to understand things like:
What is your business worth today?
What would you like it to be worth when you sell?
Is the business dependent on you personally?
Are your financial records clean and reliable?
Is the business consistently profitable?
What assets are held inside and outside the business?
What structure owns those assets?
Could the small business CGT concessions apply?
And perhaps the biggest question of all:
How much do you actually need from the sale?
Because a $2 million sale price doesn’t necessarily mean you walk away with $2 million to spend.
Your business value and your personal wealth are two different things
This is something we talk about regularly at Amarose.
For many small business owners, their business becomes their biggest asset.
They spend years reinvesting profits, buying equipment, employing people and growing the operation.
And it’s very easy to reach a point where most of your wealth is tied up in the business.
That creates risk.
Your business can absolutely be an important part of your wealth strategy — but ideally, it shouldn’t be your only wealth strategy.
As your business becomes more profitable, it’s worth asking:
How am I turning business success into personal wealth?
Are you building superannuation?
Are you investing outside the business?
Are you reducing personal debt?
Are you building assets that aren’t dependent on the business continuing to operate?
And if you eventually sell, what will happen to the proceeds?
These questions become even more important as the CGT landscape changes.
What about family trusts?
The Government has also announced separate reforms affecting discretionary and family trusts, including a proposed 30% minimum tax from 1 July 2028.
We’ve covered those changes separately because they deserve their own explanation.
If your business or investments are held through a family trust, read our guide:
Family Trust Tax Laws Are Changing: What Does the New 30% Tax Actually Mean for You?
It’s important not to automatically restructure or change your trust because of the announced reforms.
Your structure needs to be considered alongside your business, investments, asset protection, succession plans and long-term financial goals.
So, what should you do now?
For most people, there is no need to rush out and sell an asset simply because the CGT rules are changing.
But there is a very good reason to start planning.
If you own a business, investment property, shares or other significant assets, particularly assets that have increased substantially in value, the next couple of years provide an opportunity to understand your position.
That could include reviewing:
- what assets you currently own
- which entities own them
- their cost base and available records
- how long you’ve held them
- potential current values
- whether small business CGT concessions could apply
- your plans to sell or transfer assets
- your retirement and succession plans
- how your business fits into your broader personal wealth strategy.
The earlier you understand these things, the more options you generally have.
Don’t let tax drive the whole decision
Tax matters.
But we don’t believe it should be the only thing driving your financial decisions.
If you’ve spent years building a valuable business or investment portfolio, your goal shouldn’t simply be:
“How do I pay the least tax?”
A better question is:
“How do I make the most of what I’ve built?”
That means looking at tax alongside cash flow, business value, investments, superannuation, succession, retirement and the lifestyle you want your wealth to ultimately support.
That’s where good advice becomes much more than compliance.
Thinking about selling your business or an investment?
If you’re considering selling your business, property or another significant asset over the next few years, don’t wait until there’s a contract sitting in front of you to start thinking about CGT.
Talk to us early.
We can help you understand your current position, identify questions that need to be addressed and work with you and your other advisers to plan for what comes next.
Contact Amarose Accounting to start the conversation.
Because you’ve worked hard to build your business and your wealth.
The next step is making sure you have a plan for what you do with it.
Further reading
For more information about the announced changes and the existing CGT rules:
- Australian Treasury – 2026–27 Budget tax system changes
- Australian Treasury – CGT and Discretionary Trusts Reform: Small Business Explainer
- Australian Taxation Office – Capital Gains Tax
- Australian Taxation Office – Small Business CGT Concessions
This article provides general information only and does not constitute tax, legal, financial or investment advice. The announced reforms have future commencement dates and aspects of their implementation may be subject to legislation and further guidance. Your CGT position will depend on your individual circumstances. Please seek professional advice before selling, transferring or restructuring significant assets.