Albanese announces ‘generous’ capital gains tax exemptions for small businesses after budget backlash
Summary
Australia’s Prime Minister Anthony Albanese announced that small businesses will get generous exemptions from capital gains tax after criticism of planned tax reforms. Changes include raising the turnover threshold and giving special treatment to startups and certain trusts to reduce their tax burden.Key Facts
- Australia has 2.7 million small businesses that will receive capital gains tax (CGT) exemptions.
- The government is moving away from a flat 50% CGT discount to an inflation-linked system, which faced industry criticism.
- Entrepreneurs and small firms below $2 million turnover were concerned about higher taxes under the proposed reforms.
- The turnover threshold for small business CGT concessions will increase to $10 million.
- About 98% of active businesses will qualify for CGT concessions after these amendments.
- The government will keep all four existing CGT concessions but will make one broader and more generous.
- These changes will cost the budget $475 million but are part of reforms expected to raise $8.1 billion overall.
- Testamentary trusts (used to distribute income from deceased estates) will be exempt from a proposed 30% minimum tax on discretionary trusts, with more details to come.
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