The 1 July 2027 CGT changes: what business owners should know

What actually changed

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received assent on 26 June 2026. It is law, not a proposal. Its main CGT changes apply to CGT events from 1 July 2027 (for most owners, a sale, transfer or other disposal from that date), with the deemed sale just before that date and the small business CGT concession changes from the income year that includes 1 July 2027.

Three changes matter for a business owner:

A partnership is not taxed as a separate entity for CGT, so the change reaches each partner's share of a gain.

The 30% floor applies to individuals. A trust's gain is generally caught when it flows to a resident individual beneficiary. The Act carves out years in which a person receives certain government payments, such as the age pension: worth raising with your adviser if you plan to sell around retirement.

One sale, two gains

Nothing is taxed on 30 June 2027. Instead, the law draws a line through your ownership. If you are an Australian resident individual, or a trust meeting the conditions, and hold a CGT asset at the end of 30 June 2027, you are treated as selling it just before 1 July 2027 and buying it back on 1 July 2027.

The deemed sale is automatic. The notional gain waits until a real sale or other CGT event, perhaps decades away. Then the gain is worked out in two parts:

• Growth up to 30 June 2027: the old rules. If the asset qualifies in the usual way, the 50% discount can still apply.
• Growth from 1 July 2027: the new rules. The 30 June 2027 amount becomes your starting cost; in general it is indexed for inflation and gets no 50% discount.

The 30 June 2027 figure sets the split, so it needs to be the most supportable figure, not the highest: the ATO may review a valuation, and the onus to support it stays with the taxpayer.

Indexation removes only inflation. As a rough rule, where value grows by more than twice the rate of inflation over the holding period, indexation removes less of the gain than the old discount would have. Fast-growing businesses feel the change most. Your tax adviser works out the actual tax.

Who the change reaches

The rules follow whoever owns each asset, not the business. Map who holds what before asking whether the line touches you.

Foreign and temporary residents and complying super funds sit outside the transitional rule. Assets acquired before 20 September 1985 have their own rule: they may be treated as sold and bought back just before 1 July 2027, which generally keeps earlier gains exempt but lets later gains be taxed.

Our article on company, trust or partnership ownership goes deeper.

If your business sits in a company

Companies cannot use the 50% discount, and that does not change. The transitional rule does not reset a company's own post-CGT assets, and companies are outside the new CPI indexation and the 30% minimum tax.

The trap is assuming that ends the matter. If you or your family trust hold shares in the company, those shares are CGT assets in your hands, deemed sold and bought back like any other. Their value at 30 June 2027 usually depends on what the business inside was worth that day.

So in a typical family group, with a trust holding the shares in an operating company, the question is the value of the shareholding: the business first, then the interest. Our short answer on whether a company needs a 30 June 2027 valuation covers the common cases.

Fixing the 30 June 2027 figure

The law gives two ways to set the amount at the line. The default is the asset's market value just before 1 July 2027, which is what a valuation as at 30 June 2027 establishes. The alternative is a permitted apportionment method: a formula the Minister sets by legislative instrument under section 112-185.

That method is still a draft. The Government released it for consultation on 4 August 2026, describing it as covering real property and assets without a readily ascertainable market value. It may change.

You do not choose on 30 June 2027: generally, the choice is made by the day you lodge the return for the year of the later sale. A valuation is not a legal requirement and has no due date. What it does is record a supportable market value, with its evidence, while that evidence still exists.

Our articles on valuation or apportionment, and on preparing your records for a 30 June 2027 valuation, go further.

The small business concessions continue

The four small business CGT concessions in Division 152 continue after 1 July 2027: the 15-year exemption, the 50% active asset reduction, the retirement exemption and the small business rollover. The usual conditions still apply, including the active asset test.

Under the Act, from the income year that includes 1 July 2027 the 50% active asset reduction is available to businesses with aggregated turnover under 10 million dollars, up from 2 million. The other three keep the existing tests: turnover under 2 million dollars, or net assets of no more than 6 million dollars. The reduction can still apply after indexation.

The maximum net asset value test uses market values, so an owner relying on the concessions may need values anyway. Our article on the small business CGT concessions explains where a valuation fits.

What is settled and what is still moving

The last item is often confused with the CGT change. It is a separate proposal, released as exposure draft legislation in September 2026, and it may change before Parliament deals with it.

What to do between now and 2027

1. 01List who owns whatEach asset that matters, such as goodwill, shares, units or a partnership interest, and who holds it.
2. 02Ask your accountant three questionsDoes the deemed sale touch each asset? Would a market value or, once finalised, the apportioning method suit it? Are the small business concessions in play?
3. 03Keep the evidenceCustomer lists, contracts, budgets, leases and management accounts from around 30 June 2027 are easy to keep now and hard to rebuild later.
4. 04Book if a valuation is wantedIt is prepared once the accounts to 30 June 2027 exist. Booking early secures a place.

Independent Business Valuation values businesses, private company shares, trust-held businesses and partnership interests. Every report is prepared by a suitably qualified business valuer at Valuation Group. We do not give tax advice: your tax adviser decides whether the rules apply and which route to use.

The fixed fee applies once we confirm the interest, purpose, structure and records fit the fixed-fee scope. Anything outside it is quoted in writing before we start. Fixed fee, confirmed in writing before we start. No hourly billing and no surprises.