On 18 June 2026, the Government confirmed the small business CGT concessions will stay and announced further capital gains tax (CGT) relief for small businesses and startups. The changes respond to strong feedback from the sector after the original Budget proposal.
The message is more positive than the Budget first suggested. Existing small business concessions are staying, the active asset concession will be expanded, covering a greater number of small businesses, and a new discount is proposed for eligible shares and options for startup founders and early investors.
Here is what changed, who benefits, and what to do next.
If you have a specific question, jump straight to the FAQs.
The four small business CGT concessions are being retained in their current format.
The 50% active asset reduction will now be available for businesses up to $10 million turnover (up from the current $2million turnover threshold).
A new 50% discount is proposed for startup founders, early investors and employee share scheme participants.
Income from all testamentary trusts will be exempt from the minimum tax on discretionary trusts.
The startup concession is open for consultation until 10 July.
In the 2026-27 Budget, the Government proposed replacing the 50% CGT discount with a discount based on inflation, plus a minimum 30% tax on gains, from 1 July 2027. The stated aim was connected to ensuring intergenerational fairness by creating a better tax system for workers, first home buyers and future generations.
For many owners and investors, the concern was the loss of reward for risk and reinvestment, particularly when selling a business or backing a growing one. We heard it directly. Findex surveyed 171 small and medium business clients on the original proposal. 78% opposed it, almost a third expected to bring forward a sale or exit, and more than one in five expected to cut hiring before the changes were even law.
The Government will retain all four existing small business CGT concessions. These let eligible businesses reduce, defer or eliminate CGT when they sell active business assets.
It is also lifting the turnover threshold for the 50% active asset reduction from $2 million to $10 million. This brings it into line with the small business turnover threshold for the instant asset write-off. As a result, the Government says 2.7 million active small businesses and 98% of active businesses will be eligible for a 50% CGT discount on active business assets.
For many owners, these concessions are an important factor in determining how much tax they pay on the sale of a business built over decades. Keeping them, and extending the active asset reduction to more businesses, removes a major source of uncertainty for anyone planning a sale, exit or succession.
Planning a sale or succession? Talk to your Findex advisor about how the concessions apply to you.
The Government has released a consultation paper on a new Innovative Business CGT Concession (IBCC). It would give early-stage investors, founders and employee share scheme participants a 50% CGT discount on qualifying shares and options.
Under the proposed design, investors could choose between the 50% IBCC discount and no minimum tax, or indexation plus the minimum tax, for gains accrued from 1 July 2027. Subject to consultation, eligible shares would need to be:
New equity issued after 30 June 2027 in a company under 10 years old, or potentially up to 15 years for sectors such as biotech and medtech where regulatory requirements might necessitate a longer timeframe
In a company with turnover under $50 million
In a company which is an active, innovative start-up
Held for at least five years before they are sold
Within a lifetime cap for the concession of $10 million per individual
Early-stage shares often start with a low or zero cost base, so a future sale can produce a large taxable gain. The proposed concession is designed to keep backing innovative startups attractive.
If you are a founder or early investor, talk to Findex about how the proposed concession could affect your future gain.
More clarity on inheritances. Income from all types of testamentary trusts will be excluded from the minimum tax for discretionary trusts. The Government has confirmed there will be no tax on inheritances or deceased estates. For trusts established after 1 July 2028, this will be limited to trusts that can only benefit individuals and income tax exempt entities
More certainty in the law. The Government will aim to make these changes through amendments to the legislation in the Senate, rather than through ministerial powers. That gives more certainty on the detail.
The direction is now clearer, but much of the detail is still in consultation, and some changes do not start until 1 July 2027. What to focus on depends on your situation:
If you run an established small business. Your CGT concessions are staying. Plan your sale, exit or succession around the rules that exist today.
If you are a founder or early investor. Watch the Innovative Business CGT Concession closely. The final design will shape how much of your future gain is discounted.
If you use a trust structure. Testamentary trusts are now excluded from the minimum tax, but the wider trust changes are still moving. Do not rush to restructure before the legislation is settled.
If you are selling soon. Get advice on timing. The new CGT arrangements apply to gains accrued from 1 July 2027, so the timing of a sale can change the result. Your advisor can model both outcomes.
18 June 2026: Government announces further CGT concessions for small business and startups and opens the startup consultation.
10 July 2026: Consultation on the Innovative Business CGT Concession closes.
1 July 2027: New CGT arrangements (indexation plus 30% minimum tax) take effect. The Innovative Business CGT Concession would apply to gains accrued from this date.
No. The Government will retain all four existing small business CGT concessions, which let eligible businesses reduce, defer or eliminate CGT when they sell active business assets.
Eligibility depends on meeting the basic conditions, including the turnover or net asset tests and the active asset test. The active asset reduction now applies to businesses with turnover up to $10 million. Your advisor can confirm whether you qualify.
The turnover threshold rises from $2 million to $10 million. The Government says 2.7 million active small businesses and 98% of active businesses will be eligible.
It is a proposed 50% CGT discount for startup founders, early investors and employee share scheme participants on shares and options which meet the requirements. It is open for consultation until 10 July, with final design to follow.
No. Income from all types of testamentary trusts is exempt from the discretionary trust minimum tax. The Government has confirmed there is no tax on inheritances or deceased estates.
The new CGT arrangements take effect from 1 July 2027. The startup concession would also apply to new shares and options issued from that date, subject to consultation.
Findex advisors work across accounting, tax, business advisory and SMSF from a single integrated platform, so your decisions get made with the full picture in view.
If you are planning a business sale, backing a startup, or reviewing your structure, the right starting point is a conversation that looks across your whole position. When you are ready to talk, we are ready to listen.
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