A senior financial services stakeholder has confirmed the 2026 federal budget did not include any direct changes to the small business capital gains tax (CGT) concessions many individuals use to make contributions into their SMSFs, but this does not mean the provisions have not been affected.
“[The budget had no direct] impact on the small business CGT concessions. So they still operate [as normal]. There has been no change around their operation,” BT head of financial literacy and advocacy Bryan Ashenden told attendees of a technical webinar today.
“However, because of the changes to the other methodologies in terms of calculating the [other] capital gains before you come through to actually apply the small business CGT concessions, there could be a flow-on impact in terms of what the amount of capital gain that is then available to utilise the small business CGT concessions.”
Ashenden pointed out there is one element of the small business CGT concessions that will remain completely unchanged regardless of the budget measures.
“The one exception to [the indirect effect of the changes to the CGT rules] would be the 15-year small business CGT exemption because that applies as a priority and [no other calculations are necessary for its operation] in terms of losses or any of those sorts of things,” he explained.
He took the opportunity to suggest exactly how the budget measures could affect the small business CGT concessions.
“The impact might be, for an individual at the moment, if you qualify as a small business taxpayer, you get your standard 50 per cent [CGT] discount and then you could get another 50 per cent discount under the small business CGT concessions, so 75 per cent in total if you like,” he indicated.
“Going forward, and let’s just assume [we’re dealing with] a new asset purchased after 1 July 2027, so all in the new regime, you won’t have that [initial] 50 per cent discount.
“[Instead] you’d be looking at it from an indexed-gain perspective. So you’ll work out the indexed gain and then, whatever that is, you can apply the small business 50 per cent CGT discount to it.”
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
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