Government to alter capital gains discount for small businesses – BeanScene

Following consultation with the startup and small business sectors, the Australian Federal Government has announced it is seeking to extend the 50 per cent extra capital gains tax discount for small businesses.

Under the 2026 Federal Budget released by Treasurer Jim Chalmers in May, the discount could only be accessed by businesses with an annual turnover of up to $2 million. Under the new proposal, that figure will rise to $10 million.

Treasurer Chalmers says the decision to raise the threshold is in line with how small businesses were defined elsewhere in the system.

“There are four existing concessions for businesses in the CGT system. We’re leaving all four in place, but we’re making one of them substantially broader and significantly more generous at the same time,” he says.

The discount applies in addition to the standard 50 per cent capital gains tax discount in place when businesses or business assets are sold.

A press release from the office of Prime Minister Anthony Albanese says the change means all 2.7 million active small businesses in Australia, and 98 per cent of all active businesses, will be eligible for this concession.

The government will introduce amendments to the legislation currently before the Senate to give effect to this change.