Quick Summary
The key small business reforms are:
Permanent $20,000 Instant Asset Write-Off.
Permanent two-year Loss Carry-Back regime.
New Start-Up Loss Refundability Scheme.
Expansion of Small Business CGT concessions.
Restructuring relief for businesses affected by trust reforms.
PAYG reporting simplification measures.
Venture capital and innovation support reforms.
Key Dates
| Date | Event |
|---|---|
| 12 May 2026 | Budget announcement |
| 1 July 2026 | Permanent $20,000 Instant Asset Write-Off commences |
| 1 July 2026 | Loss Carry-Back regime recommences |
| 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 | Trust restructuring rollover relief commences |
| 1 July 2028 | Start-Up Loss Refundability commences |
What This Means for FMA Clients
Biggest winners
Small businesses investing in equipment.
Companies experiencing fluctuating profitability.
Start-ups.
Businesses planning an eventual sale.
Trusts requiring restructuring before 2028.
Practical Planning Opportunities
For many SME clients the key questions will be:
Should planned equipment purchases be accelerated?
Can prior-year tax be refunded through loss carry-back?
Does the business qualify for the expanded CGT concessions?
Should trust structures be reviewed before July 2028?
1. Permanent $20,000 Instant Asset Write-Off
For years, small businesses have experienced uncertainty because the instant asset write-off was repeatedly extended on a temporary basis. The Budget permanently extends the measure from 1 July 2026.
Who qualifies?
Businesses with aggregated turnover below $10 million.
What can be claimed?
Eligible depreciating assets costing less than $20,000 can generally be immediately deducted.
Benefits
Improves cash flow.
Simplifies depreciation calculations.
Provides long-term certainty for investment decisions.
2. Permanent Loss Carry-Back
One of the most significant business reforms is the return of the loss carry-back regime. This measure is now law.
How it works
Eligible companies can:
Make a tax loss this year.
Carry that loss back.
Offset it against tax paid in either of the previous two years.
Receive a refund of previously paid tax.
Eligibility
Corporate tax entities.
Global aggregated turnover below $1 billion.
Commencement
Applies to income years starting on or after 1 July 2026.
3. Start-Up Loss Refundability
The Budget introduces additional support for early-stage businesses.
Commencement
1 July 2028.
Eligibility
Generally:
Start-up companies.
Aggregated turnover below $10 million.
First two years of operation.
Benefit
Instead of carrying tax losses forward and waiting years to benefit from them, eligible start-ups may receive a refundable tax offset linked to payroll-related taxes paid.
This is intended to improve cash flow during the critical early years of a business.
4. Expansion of Small Business CGT Concessions
One of the less-publicised but potentially valuable reforms is the expansion of access to Small Business CGT relief.
Current Rule
Businesses often needed to satisfy a $2 million aggregated turnover test.
New Rule
From 1 July 2027, the turnover threshold increases to:
$10 million aggregated turnover.
Why This Matters
More businesses may qualify for:
50% Active Asset Reduction.
Other small business CGT concessions.
Reduced tax on business sale transactions.
For many FMA clients considering succession or sale, this could be one of the most valuable reforms in the package.
5. Trust Restructuring Relief
The Budget's discretionary trust reforms are accompanied by restructuring relief.
Commencement
1 July 2027
Purpose
Allow small businesses operating through discretionary trusts to:
Restructure ownership.
Move assets into alternative entities.
Minimise immediate tax consequences.
This is particularly relevant for SME family groups currently operating through discretionary trust structures.
6. PAYG Reporting Simplification
The Government also announced simplification measures aimed at reducing compliance costs and administrative burden for businesses.
The stated aim is to make tax administration easier and reduce time spent dealing with reporting obligations.
7. Venture Capital and Innovation Measures
The Budget included reforms designed to encourage:
Innovation.
Venture capital investment.
Productivity improvements.
Business growth and risk-taking.
Many of these measures require further legislation and implementation detail.