Quick Summary
The key reforms affecting business owners and SMEs are:
Permanent $20,000 Instant Asset Write-Off
Permanent Loss Carry-Back Regime
Small Business CGT Concession Expansion
Trust Restructuring Rollover Relief
Start-Up Loss Refundability
Capital Gains Tax reform
30% Minimum Tax on Discretionary Trusts
PAYG and tax administration simplification measures
Key Dates
| Date | Event |
|---|---|
| 12 May 2026 | Budget announcement |
| 1 July 2026 | Permanent $20,000 Instant Asset Write-Off commences |
| 1 July 2026 | Permanent Loss Carry-Back regime commences |
| 26 August 2026 | Loss Carry-Back and Instant Asset Write-Off legislation receives Royal Assent |
| 1 July 2027 | Expanded Small Business CGT concessions commence |
| 1 July 2027 | CGT reform commences |
| 1 July 2027 | Trust restructuring rollover relief commences |
| 1 July 2028 | Proposed commencement of 30% minimum trust tax |
| 1 July 2028 | Start-Up Loss Refundability commences |
Who This Impacts
The reforms are most relevant to:
Small and medium businesses (SMEs)
Company directors
Business owners planning a future sale
Professional services firms
Trades and construction businesses
Manufacturing businesses
Retail and hospitality operators
Technology businesses and start-ups
Businesses investing in equipment, technology or vehicles
Businesses operating through company or trust structures
1. Permanent $20,000 Instant Asset Write-Off
What changed?
The Government permanently extended the $20,000 Instant Asset Write-Off from 1 July 2026, ending years of uncertainty caused by annual extensions.
Who qualifies?
Businesses with aggregated turnover below $10 million.
Benefit
Eligible assets costing less than $20,000 can generally be immediately deducted rather than depreciated over several years.
Examples
Computers
Servers
Laptops
Office furniture
Equipment
Tools
Certain vehicles (subject to normal tax rules)
Why it matters
Improves cash flow
Simplifies tax administration
Provides certainty around business investment decisions
2. Permanent Loss Carry-Back Regime
What changed?
The Government permanently reintroduced Loss Carry-Back for eligible companies. This measure is now law.
How it works
A company that incurs a tax loss can:
Carry the loss back.
Offset it against taxable profits from either of the previous two years.
Receive a tax refund based on tax previously paid.
Who benefits?
Companies with turnover below $1 billion.
This is particularly useful for:
Construction businesses
Start-ups
Seasonal businesses
Businesses facing temporary downturns
High-growth companies
Why it matters
Losses can be immediately monetised rather than sitting unused until future profits are generated.
3. Expanded Small Business CGT Concessions
What changed?
The turnover threshold for access to key Small Business CGT concessions increases from $2 million to $10 million from 1 July 2027.
Why it matters?
This is potentially the most valuable reform for business owners planning an eventual exit.
Eligible businesses may access:
50% Active Asset Reduction
Retirement Exemption
Other Small Business CGT concessions
subject to existing eligibility requirements.
Impact
Many businesses previously excluded from these concessions may now qualify
This is particularly important for:
Succession planning
Business sales
Ownership restructures
Retirement planning
4. Capital Gains Tax Reform
What changed?
From 1 July 2027:
The 50% CGT discount is replaced with inflation-based cost base indexation.
A 30% minimum tax on capital gains is introduced.
Transitional rules apply to gains accruing before and after commencement.
Why business owners should care
This affects:
Business sales
Commercial property owned by a business
Shares in private companies
Business succession transactions
Businesses considering a sale in coming years should review how the new CGT rules interact with Small Business CGT concessions.
5. Trust Restructuring Relief
What changed?
The Government is introducing a three-year restructuring rollover from 1 July 2027.
Purpose
Allows eligible businesses to:
Change ownership structures
Move assets between entities
Restructure ahead of future trust reforms
without triggering immediate tax consequences in many situations.
Why it matters
Business owners have a limited window to review structures before the discretionary trust changes commence.
6. Discretionary Trust Reform
What changed?
The Government proposes a 30% minimum tax on discretionary trusts from 1 July 2028. As at September 2026 the legislation remains under consultation.
Why it affects businesses
Many SMEs operate through discretionary trust structures.
The proposed changes may:
Reduce flexibility in distributing profits
Reduce tax planning opportunities
Require review of existing ownership structures
Key takeaway
Businesses using discretionary trusts should begin reviewing structures well before 2028.
7. Start-Up Loss Refundability
What changed?
From 1 July 2028, eligible start-up companies can convert certain early-stage losses into refundable tax offsets.
Who qualifies?
Generally:
Start-up companies
Turnover below $10 million
First two years of operation
Why it matters
Provides cash flow support during the highest-risk period of a business lifecycle.
8. Compliance and Administration Simplification
The Budget also included measures aimed at simplifying:
PAYG administration
Tax reporting obligations
Compliance requirements
for SMEs and growing businesses.
The objective is to reduce red tape and compliance costs.