Australia offers CGT exemptions for small businesses after budget backlash

The government will increase the annual turnover threshold for small businesses to qualify for CGT concessions to $10 million, aligning it with other small business definitions. Treasurer Jim Chalmers stated that these amendments will ensure 98% of active businesses receive CGT concessions, leaving four existing concessions in place while making one substantially broader and more generous. These changes are projected to cost the budget $475 million over the forward estimates, a fraction of the $8.1 billion expected to be raised from broader negative gearing, capital gains, and trust reforms.

Additionally, testamentary trusts, which manage assets from deceased estates, will be exempted from the proposed 30% minimum tax on discretionary trusts. Chalmers indicated that further details on these trust carve-outs will be provided in a forthcoming consultation paper, and these amendments will not be part of the initial legislation submitted to the Senate.