The Budget handed down on 12 May 2026 was, by broad agreement across the profession, one of the most significant for tax and accounting in decades. It reaches well beyond the usual small-business tinkering into the structural core of how capital gains, trusts, and property investment are taxed, and for many firm clients it changes the long-term arithmetic of decisions they made years ago. Before getting into the detail, the single most important thing to hold onto, and to repeat to clients, is that almost none of these measures is law. They are announcements, several with start dates a year or more away, and every one still has to pass Parliament, quite possibly in amended form. The right posture is to review and model now, and to change nothing structural until the legislation lands.
The two changes that reshape long-term structuring
Two announced measures stand out for how deeply they cut. The first is the overhaul of the capital gains tax discount. From 1 July 2027, the Government proposes to replace the 50% CGT discount for individuals, trusts, and partnerships with a return to cost base indexation, similar to the pre-1999 regime, paired with a 30% minimum tax on the real gain that remains after indexation. The minimum tax operates as a floor: where a client's marginal rate on the real gain already reaches 30% or more it has no effect, but where it falls below 30%, the client pays additional tax to lift the effective rate to 30%. The stated aim is to stop the long-standing strategy of timing a sale into a low-income year such as retirement. It applies to all CGT assets, not just property, so shares, units, and business assets are all in scope, with transitional rules that only bring gains accruing after 1 July 2027 into the new regime. Companies are unaffected, because they never had the discount.
The second is the proposed 30% minimum tax on discretionary trusts, flagged from 1 July 2028. This is the measure with the widest reach into the firm's own client base, because the discretionary trust is the workhorse structure for so many family businesses and investors. In broad terms it is designed to neutralise the practice of streaming trust income to lower-income family members to access their marginal rates, by applying a 30% floor. SMSFs and widely held trusts such as most managed investment trusts are excluded, and certain income is carved out, but the details that will decide who is genuinely affected are exactly the details still to come in the draft legislation. The Government has flagged three years of rollover relief from 1 July 2027 for clients who ultimately restructure out of a discretionary trust, which is a signal that some clients will need to, but not a reason to move before the rules are settled.
The three changes that help, and land sooner
Against those two structural shocks sit three more welcome measures. The permanent extension of the $20,000 instant asset write-off from 1 July 2026 is the one the profession has been asking for after a decade of temporary, last-minute extensions, and if legislated it finally gives small business clients with turnover under $10 million the certainty to plan asset purchases in advance rather than gamble on whether the threshold survives another year. The bodies that represent practitioners welcomed it specifically for that certainty. The second is the reintroduction of loss carry-back, proposed for income years commencing on or after 1 July 2026, letting companies with aggregated turnover under $1 billion carry a revenue loss back against tax paid in the prior two years, limited by the franking account balance. For company clients moving through a loss year after profitable ones, this converts a loss into a cash refund rather than a carried-forward deferral, which is a genuine cash-flow lever. The third, from 2028-29, extends a form of that idea to early-stage start-ups by letting them turn certain first-two-years losses into a refundable offset capped at the FBT and withholding paid on wages.
The theme across these three is cash flow and certainty rather than structural change, and they are the measures a firm can most usefully raise with clients now, precisely because they reward forward planning. A client weighing an equipment purchase, or a company anticipating a lean year, can factor these in to timing decisions, with the standard caveat that the write-off is still a deduction and not a reason to buy something the business does not need.
What firms should actually do before the law lands
The tension in this Budget is that the measures demanding the most thought are the least settled, which makes "review now, act later" the only responsible stance. In practice that means starting the analysis without triggering any transactions. For clients holding CGT assets, it is worth identifying who might benefit from realising a gain under the current 50% discount before 1 July 2027, while flagging that this is a modelling exercise, not yet a recommendation. For trust clients, the useful first step is to understand which clients rely on discretionary distributions to lower-rate beneficiaries and would feel the minimum tax, so that when the draft legislation appears the firm can move quickly rather than start cold. For small business and company clients, the permanent write-off and loss carry-back can be built into cash-flow and asset planning now, since they are the measures most likely to survive largely intact. Above all, the message to every client is the same one the whole profession is giving: this is a Budget to prepare for, not to react to. Premature restructuring on the strength of an announcement is how clients get hurt, and the value a firm adds this year is the discipline to model the impact early and hold steady until the rules are real.
