The changes proposed in the Federal Budget are not yet law. To make things simple, there are many different dates that need to be considered.
Draft legislation is yet to be released, and many political debates are yet to be had. Things could still change.
Capital Gains Tax
- The 50% CGT discount will be replaced with indexation of cost base (CPI-linked) from 1 July 2027
- A minimum 30% tax will apply to net capital gains from 1 July 2027
- Applies broadly across asset classes, not just property
- Includes assets purchased prior to September 1985 that were previously CGT Free – for any growth from 1 July 2027 onwards
Trust Taxation
- Introduction of a 30% minimum tax on discretionary trusts from 1 July 2028
- Potential double tax outcomes for corporate beneficiaries
- Government offering rollover relief from 1 July 2027 to 30 June 2030 to facilitate transitions to a company or fixed trust
Negative Gearing
- Negative gearing limited to new residential property from 1 July 2027
- Losses on established properties quarantined against rental income from 1 July 2027
- Grandfathering for properties already owned at 12 May 2026
Business Tax Support
- Loss carry-back reintroduced from 1 July 2026 – limited by the company’s franking account balance
- Loss refundability for start-up companies from 1 July 2028 – limited by the company’s payments of FBT and PAYG Withholding on employee wages
- Permanent extension of $20,000 Instant asset write-off for small businesses with turnover up to $10m
Electric Cars – FBT Exemption Phase Out
- Now to 31 March 2027 – EVs under $91,387 FBT exempt
- From 1 April 2027 – EVs under $75,000 FBT exempt and EVs between $75,000 and EV Luxury Car Tax Threshold (Currently $91,387) receive 25% FBT discount
- From 1 April 2029 – EVs under EV Luxury Car Tax Threshold (Currently $91,387) receive 25% FBT discount
If you have any questions in relation to the Federal Budget, please do not hesitate to contact your Harris Black Tax Specialist.