Selling your business one day? What the proposed Budget CGT changes mean for owners
If selling your business one day is part of your plan, you've probably heard the 50% capital gains tax discount is being scrapped. This one is now law, it passed Parliament in June 2026, and it starts on 1 July 2027. So it's worth understanding properly. The good news is it's more manageable than the headlines suggest, and there's a clear action that protects you.
What's actually changed
From 1 July 2027, the flat 50% CGT discount is replaced by two things: your cost base gets indexed for inflation, and a minimum 30% tax rate applies to the real gain. The idea is you're taxed on your genuine gain after inflation, not the headline number. This applies to individuals, trusts and partnerships, across most asset types including business goodwill, shares and property.
The reassuring part: your existing value is protected
The new rules only apply to gains that build up after 1 July 2027. Everything you've built before that date keeps the old 50% discount treatment. So the years of work already in your business are protected. This is the bit the scary headlines skip.
The good news for growing businesses
If you turn over between $2 million and $10 million, there's a genuine win here. The turnover threshold for one of the small business CGT concessions has been lifted from $2 million all the way to $10 million. And the broader small business CGT concessions remain in place. For eligible owners, these can still dramatically reduce, or even eliminate, the CGT on selling your business. Over 90% of active small businesses already qualify for these.
The one thing every business owner should think about: a 2027 valuation
Here's the practical bit almost no one is talking about. Because the old rules protect the value built up to 1 July 2027, you need to know what your business was worth on that date. If you don't have a defensible market valuation at the transition date, the tax office falls back to a generic formula that assumes your business grew at a flat, even rate the whole time. For most businesses that grew unevenly, that formula can drag your protected, pre-2027 growth into the higher new tax bracket, and cost you.
So if you might sell any time after 1 July 2027, getting an independent valuation at that date is one of the most valuable tax documents you'll ever get. It locks in your protected value.
What to do now
If a sale is anywhere in your next five years, now's the time to understand your position, check whether you qualify for the small business concessions, and plan for that transition-date valuation. This is exactly the kind of forward planning we do. Let's map out your exit properly, well before it matters.