Business Restructure and CGT Rollover Relief in Australia: A 2026–27 Accountant's Guide

The 2026–27 Federal Budget has introduced a wave of structural tax reforms that will fundamentally change how many Australian businesses are taxed. From the permanent $20,000 instant asset write-off to a three-year CGT rollover relief window for business restructures, and new loss carry-back provisions for companies, the opportunities — and the risks of inaction — have never been greater. For business owners operating through trusts, companies, or sole trader structures, now is the time to engage a qualified accountant to review your entity structure and tax position before the reform deadlines arrive.

Understanding the 2026–27 Business Tax Reform Landscape

The Australian Government's 2026–27 Budget delivered a package of business tax measures that affect entity structures, capital gains, and cash flow management. Understanding how these reforms interact is essential for any business owner making decisions about structure, investment, or succession.

The reforms fall into three broad categories: changes to how discretionary trusts are taxed from 2028, a CGT rollover relief window for businesses that need to restructure, and permanent improvements to instant asset write-off and loss carry-back provisions. Each of these has different timing, eligibility criteria, and planning implications.

The 30% Minimum Tax on Discretionary Trusts: What Business Owners Must Know

From 1 July 2028, a 30% minimum tax will apply to distributions from discretionary trusts, levied at the trustee level. This measure is designed to reduce income splitting — the practice of distributing trust income to family members in lower tax brackets to reduce the overall tax burden of high-income earners.

Beneficiaries (other than corporate beneficiaries) will receive non-refundable tax credits for the tax paid by the trustee. This means the 30% tax is not an additional layer of tax — it is a floor that ensures trust distributions are taxed at a minimum effective rate, regardless of the beneficiary's marginal rate.

Who Is Affected

The 30% minimum tax applies to discretionary trusts — the most common structure used by Australian family businesses and professional practices. Fixed trusts, primary production trusts, and certain testamentary trusts are exempt. Superannuation funds are also unaffected.

For many business owners currently distributing trust income to adult children, spouses, or other family members in lower tax brackets, the 2028 changes will significantly reduce the tax advantage of this strategy. An accountant can model the impact on your specific distribution pattern and help you evaluate whether restructuring is appropriate.

The CGT Rollover Relief Window: A Three-Year Opportunity

Recognising that the 2028 trust tax changes may prompt many businesses to restructure, the Government has legislated a three-year CGT rollover relief window commencing 1 July 2027. During this window, eligible businesses can restructure from a discretionary trust into a company or fixed trust without triggering immediate capital gains tax or income tax consequences.

This is a significant concession. Normally, transferring assets from a trust to a company would constitute a disposal for CGT purposes, potentially triggering substantial tax liabilities on unrealised gains. The rollover relief defers — not eliminates — these gains, which will crystallise when the assets are eventually disposed of by the new entity.

Planning for the Rollover Window

The rollover window runs from 1 July 2027 to 30 June 2030. Businesses that wish to take advantage of this relief need to begin planning well in advance. Restructuring a business entity involves legal, accounting, and operational complexity — including updating trust deeds, transferring asset ownership, revising shareholder agreements, and notifying the ATO and ASIC.

An experienced accountant working alongside a commercial lawyer can help you assess whether restructuring is appropriate for your circumstances, model the tax outcomes under different scenarios, and manage the transition process within the rollover window.

Permanent Instant Asset Write-Off: What Changes from 1 July 2026

The $20,000 instant asset write-off has been made permanent for businesses with an annual turnover of up to $10 million, effective from 1 July 2026. Previously, this concession was subject to annual renewal through the Budget process, creating uncertainty for businesses planning capital expenditure.

Under the permanent measure, eligible businesses can immediately deduct the full cost of depreciable assets costing less than $20,000 in the year of purchase, rather than depreciating them over their effective life. This provides a significant cash flow benefit and simplifies tax compliance for small businesses.

What Qualifies and What Doesn't

The instant asset write-off applies to new and second-hand assets used or installed ready for use in the income year. Assets costing $20,000 or more do not qualify and must be depreciated through the general small business pool. Certain assets — including those used for private purposes, horticultural plants, and assets leased to other parties — are excluded.

An accountant can help you identify which planned purchases qualify, time acquisitions to maximise the deduction in the most beneficial income year, and ensure the asset is correctly classified and documented for ATO purposes.

Loss Carry-Back for Companies: New Rules from 1 July 2026

From income years starting on or after 1 July 2026, companies with an annual turnover of less than $1 billion can carry back tax losses to offset tax paid in the previous two income years. This measure improves cash flow for businesses that experience a loss year after profitable years — allowing them to claim a tax refund rather than simply carrying the loss forward to offset future profits.

The carry-back amount is limited to the lesser of the tax loss, the tax previously paid in the carry-back years, and the company's franking account balance. This last condition is important: the carry-back mechanism is linked to the franking account to prevent companies from claiming refunds that would result in a negative franking balance.

For businesses that have experienced a difficult trading year following profitable years — a common pattern in sectors affected by supply chain disruptions, rising input costs, or changing consumer demand — loss carry-back can provide meaningful cash flow relief. An accountant can calculate the maximum carry-back amount and manage the refund claim process with the ATO.

Australian Regulatory Context: ATO, ASIC, and the ASBFEO

These reforms are administered across multiple regulatory bodies. The Australian Taxation Office (ATO) administers the income tax and CGT provisions, including the rollover relief conditions and the instant asset write-off eligibility rules. The ATO publishes detailed guidance on each measure and operates the data-matching and compliance programs that enforce correct reporting.

The Australian Securities and Investments Commission (ASIC) will implement specific arrangements to support small businesses that choose to incorporate as part of the restructure rollover process, including streamlined registration procedures.

From January 2027, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) will provide additional support to businesses navigating the restructure options, offering guidance on the process and connecting businesses with appropriate advisers.

Accountants advising on these matters must hold a current CPA Australia or Chartered Accountants ANZ (CA ANZ) designation and, where providing tax advice, must be registered with the Tax Practitioners Board (TPB) as a tax agent or tax (financial) adviser.

Common Mistakes to Avoid When Planning for These Reforms

• Waiting until 2028 to act on trust restructuring — The rollover relief window opens in July 2027. Businesses that wait until 2028 will have missed the opportunity to restructure without CGT consequences.
• Assuming the rollover eliminates CGT permanently — The rollover defers CGT; it does not eliminate it. Gains will crystallise on eventual disposal of the assets by the new entity. Understanding the long-term tax position is essential.
• Overlooking the franking account condition for loss carry-back — Companies with a low or nil franking account balance may not be able to access the full carry-back amount. Review your franking account position before lodging a carry-back claim.
• Purchasing assets just over the $20,000 threshold — Assets costing $20,000 or more must be depreciated through the pool. Timing purchases to stay under the threshold — where commercially appropriate — can maximise the immediate deduction.
• Not updating trust deeds before restructuring — A trust deed that does not permit the proposed restructure can create legal and tax complications. Deed review and amendment should be completed before any restructure is executed.
• Failing to document the commercial rationale for distributions — The ATO continues to scrutinise trust distributions under Section 100A. Contemporaneous documentation of the commercial or family rationale for each distribution remains essential.

Questions to Ask Your Accountant About Business Restructuring

• Is my current entity structure still optimal given the 2028 trust tax changes? — Your accountant should model the tax impact of the 30% minimum tax on your current distribution pattern.
• Would restructuring into a company or fixed trust benefit my business? — The answer depends on your income level, distribution strategy, succession plans, and asset base.
• Can I access the CGT rollover relief, and what is the process? — Eligibility conditions apply; your accountant should confirm whether your business qualifies and outline the steps involved.
• Am I maximising the instant asset write-off for planned capital expenditure? — Timing and asset classification matter; your accountant can help you plan purchases to maximise deductions.
• Does my company have carry-back losses available, and how do I claim them? — Your accountant should review your loss position and franking account balance to determine the maximum refund available.
• What documentation do I need to support my trust distributions under Section 100A? — Contemporaneous records are essential; your accountant should advise on what to prepare before 30 June each year.

How MyMoney® Can Help

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Don't let the reform deadlines catch you unprepared. Browse Accountants on MyMoney® today and connect with a specialist who can help you make the most of the 2026–27 tax changes.