The 2026–27 Federal Budget introduces major proposed tax reforms affecting SMSFs, discretionary trusts, capital gains tax, negative gearing, and small businesses. Here’s what SMSF trustees, business owners, and high-net-worth individuals should review now to stay compliant and plan ahead.
# 2026–27 Federal Budget: Key Tax Changes and Planning Considerations
The 2026–27 Federal Budget is not a normal Budget for many taxpayers. It has created significant discussion around:
- ✓Capital Gains Tax (CGT)
- ✓Negative gearing
- ✓Discretionary trusts
- ✓Small business tax
- ✓Superannuation
Key announcements include:
- ✓Replacing the 50% CGT discount with inflation-adjusted indexation from 1 July 2027
- ✓Introducing a 30% minimum tax rate on certain capital gains
- ✓Limiting negative gearing for established residential property
- ✓Applying a 30% minimum tax rate to discretionary trust income from 1 July 2028
- ✓Making the $20,000 instant asset write-off permanent
- ✓Reintroducing company loss carry-back rules from 1 July 2026
My message is simple: do not panic, but do not sit still.
Major tax reform always creates uncertainty at first, but uncertainty is not a reason to delay planning.
Australia has seen major tax changes before — whether it was:
- ✓The introduction of GST in 2000, which created confusion, timing issues, business uncertainty, and short-term market reactions; or
- ✓The 2017 superannuation reforms, which forced many SMSF trustees to review pensions, balances, and estate planning.
The lesson is clear:
> Big tax changes reward calm planning.
The people who usually do best are those who:
- ✓Review early
- ✓Keep proper records
- ✓Make decisions based on facts
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# Practical Planning Areas to Review
These Budget changes will not affect everyone in the same way. The right response depends on:
- ✓Your structure
- ✓Asset mix
- ✓Long-term plans
Below are key areas SMSF trustees, business owners, high-net-worth individuals, and family trust holders should review now.
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# Self-Managed Super Funds (SMSFs)
The Budget is not proposing to remove the normal tax treatment of complying super funds.
Complying superannuation funds are also expected to be excluded from the proposed 30% minimum tax on discretionary trust income — which is positive.
However, high-balance SMSF members should not ignore the new Division 296 tax environment.
From 1 July 2026:
- ✓Members with total superannuation balances above $3 million will face an additional tax on part of their superannuation earnings
- ✓A further layer applies above $10 million
This makes:
- ✓Fund liquidity
- ✓Asset valuations
- ✓Member balance tracking
- ✓Pension strategy
far more important.
Division 296 does not mean SMSFs are no longer useful. It simply means high-balance SMSFs require:
- ✓Better planning
- ✓Better liquidity management
- ✓Stronger record keeping
Suggested Check Points
Review member balances
Identify members likely to exceed the:
- ✓$3 million threshold
- ✓$10 million threshold
Check liquidity
Ensure the fund can meet:
- ✓Tax obligations
- ✓Pension obligations
- ✓Audit costs
- ✓Operating expenses
without forced asset sales.
Review asset valuations
Ensure accurate and supportable valuations for:
- ✓Property
- ✓Private company shares
- ✓Units in trusts
- ✓Unlisted assets
Model contribution strategy
Reconsider:
- ✓Non-concessional contributions
- ✓Downsizer contributions
- ✓Large rollovers
where balances are already high.
Review pension strategy
Confirm:
- ✓Pension accounts
- ✓Minimum pension payments
- ✓Transfer balance cap positions
Update estate planning
Check:
- ✓Binding death benefit nominations
- ✓Reversionary pension documents
- ✓Trustee succession plans
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# Small and Medium Businesses (SMEs)
SMEs may benefit from:
- ✓Permanent $20,000 instant asset write-off
- ✓Reintroduction of company loss carry-back rules from 1 July 2026
- ✓Dynamic monthly PAYG instalments from 1 July 2027
- ✓Start-up loss refundability from 1 July 2028
These measures can help, but only if used sensibly.
> A tax deduction is not a full refund.
Buying equipment just to reduce tax is not good business planning.
Suggested Check Points
Prepare a real asset plan
Only buy assets that improve:
- ✓Productivity
- ✓Cash flow
- ✓Capacity
- ✓Service delivery
Review company losses
Assess whether loss carry-back rules may become useful.
Watch timing
Consider:
- ✓Final legislation
- ✓Delivery dates
- ✓Installation dates
before major purchases.
Check structure
If operating through a trust, review whether the structure remains suitable under the proposed trust rules.
Improve compliance
Strong tax rules do not help if:
- ✓Records are poor
- ✓Invoices are missing
- ✓Depreciation schedules are incomplete
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# High-Net-Worth Individuals
This group may be most affected by the CGT and negative gearing changes.
From 1 July 2027, the Government proposes to:
- ✓Replace the 50% CGT discount with inflation-adjusted indexation
- ✓Apply a 30% minimum tax on net capital gains
This applies to:
- ✓Individuals
- ✓Trusts
- ✓Partnerships
for assets held longer than 12 months.
The proposed CGT changes are expected to be prospective, meaning:
- ✓Gains accrued before 1 July 2027 retain the current 50% discount treatment
Negative gearing for established residential property is also expected to be limited from 1 July 2027.
Properties owned at:
> 7:30 pm AEST on 12 May 2026
are expected to be grandfathered until sold.
Suggested Check Points
Map all assets
Prepare a full list of:
- ✓Property
- ✓Shares
- ✓Trusts
- ✓Private companies
- ✓Pre-CGT assets
- ✓Personally held investments
Check cost bases
Gather:
- ✓Purchase contracts
- ✓Improvement costs
- ✓Valuations
- ✓Loan records
- ✓Ownership history
Review property debt
Identify:
- ✓Negatively geared properties
- ✓Potentially grandfathered properties
Model sale timing
Do not rush to sell. Understand the tax consequences first.
Coordinate professional advice
Tax, legal, finance, and investment advice should work together before major decisions are made.
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# Family Trust Holders
The proposed 30% minimum tax on discretionary trust taxable income from 1 July 2028 is one of the most significant Budget announcements for family groups.
Under the proposal:
- ✓Trustees will pay a minimum 30% tax on discretionary trust taxable income
- ✓Beneficiaries (other than corporate beneficiaries) receive non-refundable tax credits for tax already paid by the trustee
The proposed rules are expected not to apply to:
- ✓Fixed trusts
- ✓Widely held trusts
- ✓Complying superannuation funds
- ✓Special disability trusts
- ✓Deceased estates
- ✓Charitable trusts
Certain income types are also expected to be excluded.
Expanded rollover relief is proposed for:
> Three years from 1 July 2027
for taxpayers wishing to restructure out of discretionary trusts into:
- ✓Companies
- ✓Fixed trusts
- ✓Other entity structures
Suggested Check Points
Review the trust deed
Check:
- ✓Income definitions
- ✓Streaming powers
- ✓Appointor powers
- ✓Amendment clauses
Review beneficiaries
Assess who receives distributions and whether the new minimum tax changes outcomes.
Compare alternative structures
Model outcomes under:
- ✓Company structures
- ✓Fixed trusts
- ✓Other structures
before restructuring.
Consider non-tax reasons
Trusts may still provide benefits for:
- ✓Asset protection
- ✓Succession planning
- ✓Family control
- ✓Commercial risk management
Do not restructure blindly
Restructuring may trigger:
- ✓CGT
- ✓Stamp duty
- ✓Loan complications
- ✓Division 7A issues
- ✓Legal costs
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# Final Thoughts
This Budget is more than a list of tax changes.
It signals a broader shift in how the Australian tax system may treat:
- ✓Asset income
- ✓Capital gains
- ✓Discretionary trusts
- ✓High-balance wealth structures
moving forward.
For SMSF trustees, business owners, and family groups, the focus should not be rushed restructuring.
The focus should instead be on understanding whether existing structures remain:
- ✓Commercially sound
- ✓Tax-effective
- ✓Compliant
under the proposed rules.
The next 12 to 24 months should be used wisely.
Recommended Actions
- ✓Review your position
- ✓Strengthen your records
- ✓Model likely impacts
- ✓Prepare to act once legislation becomes clear
Good planning is not about reacting to headlines.
> It is about making informed decisions before pressure builds.
# Think big. Act smart. Stay compliant.
That is still the best strategy.