From the Government Tax reform legislation passed
Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 received Royal Assent on 26 June 2026, and are now law. This means that the replacement of the CGT discount with indexation and restrictions on negative gearing are effective from 1 July 2027. The government has agreed to some changes to the original bill to secure the support of the Greens in the Senate. This includes amendments to ban limited recourse borrowing arrangements for SMSFs purchasing residential property and a delay to the NDIS reform process, allowing further consultation.
The bill was also amended to lift the turnover threshold for receiving the small business 50% active asset reduction as part of the small business CGT concessions from $2m to $10m, effective from 1 July 2027. The lower $2m threshold will still be used to determine access for the other three small business CGT concessions, and there is no change to the $6m net asset value test.
Budget Announcement
The government has announced some updates and clarity for some of the tax-related measures in the recent Federal Budget. The turnover threshold for the small business 50% active asset reduction will increase from $2m to $10m, which aligns with the threshold for the instant asset write-off, confirmed by the Government. The government may release a consultation paper for implementing maximum tax on discretionary trusts in the coming weeks.
It has been confirmed by the government that there will be an income exemption from the minimum tax for all types of discretionary testamentary trusts, provided they are established for genuine testamentary purposes. However, for trusts established on or after 1 July 2028, the exclusion will be applied only to provide benefits to individuals and income tax-exempt entities, not corporate beneficiaries. The government’s consultation paper focuses on the design of the 50% CGT discount for early-stage investors to support innovation.
The concession is proposed to allow partnerships, individuals, and trusts with eligible shares a choice between the 50% discount or indexation and the minimum tax for gains accrued from 1 July 2027. The proposed eligibility criteria include that the shares:
- Must be new equity issued after 30 June 2027, by an unlisted and independent company.
- The company’s annual turnover must be less than $50 million and less than 10 years of incorporation.
- Issued by an active start-up.
- Be held by the taxpayer for at least 5 years.
The consultation period closes on 10 July 2026.
Fuel excise relief for July
The government has announced it will extend its temporary fuel cost relief measures for another month. The government will cut the fuel excise on petrol and diesel by 16 cents per litre from 1 July to 2 August. Further, the government will reduce the Heavy Vehicle Road User Charge by 16 cents.
Review of tax and corporate whistleblowing
The government has opened a consultation for the review of tax and corporate whistleblowing laws. The review will examine whether the current whistleblower protection laws are working as intended, identify any ongoing concerns and recommend further improvements where appropriate. The consultation period closes on 29 July 2026.