A new era for asset taxation

The 2026–27 Federal Budget has introduced sweeping changes to asset taxation, and for business owners and advisers, the next nine months are critical. These reforms mean that valuations are no longer just a compliance exercise. They are now central to tax positions and future planning.

Why urgency is required

From 1 July 2027, the 50% capital gains tax discount for assets held over 12 months will be replaced by CPI indexation, and a new 30% minimum tax will apply to net capital gains. Pre-1985 assets, previously outside the CGT regime, will now be subject to these rules for future gains. Negative gearing on established investment properties purchased from budget night will be abolished from July 2027, though it remains for new builds and certain affordable housing. Distributions from trusts will also be taxed at a minimum of 30%, rather than at individual marginal rates, with primary production excluded.

A new election has been proposed that would allow certain trust distributions to be treated as fixed distributions, providing an alternative to the proposed 30% minimum tax on discretionary trusts.

These changes mean business owners must establish the market value of their assets as at 30 June 2027. This value will serve as the new cost base for future tax calculations, splitting gains between the old and new regimes. For assets acquired before 1 July 2027 but sold after, capital gains will be apportioned: gains up to 30 June 2027 will be taxed under the old rules, and gains from 1 July 2027 under the new rules. This applies to all assets impacted by the new CGT rules, including pre-CGT assets, which will be brought into the regime at their market value as at 1 July 2027.

The ATO is expected to provide guidance, but for significant or complex assets, a professional, independent valuation will be essential. A well-documented valuation ensures that any appreciation up to 30 June 2027 is taxed under the current, more favourable rules, while future gains will be taxed at higher rates and with less generous concessions. The difference could amount to substantial tax savings when a business is eventually sold or restructured.

Actions to take before 30 June 2027

With the deadline approaching, business owners and advisers should act now to improve their valuation and position themselves for the new regime:

Looking ahead

Valuations must now account for both current performance and the evolving tax environment. The ATO will expect robust, defensible valuations, and a poorly documented figure could lead to disputes, audits, or penalties.

Knowing the true value of business assets now gives owners and advisers more options, whether that means bringing forward a sale, restructuring, or simply planning with greater confidence.

The next nine months are a window to act, review, and position your business for the future. Businesses that move early and with intention will be best placed to navigate the new landscape and protect their value.