Selling Your Business in the Next 10 Years? The 2026 Budget Just Changed the Maths.

By Andre Dirckze, Principal Adviser, Wealth Effect Group

Article 5 of our detailed Federal Budget 2026–27 series. For the overview briefing, see [link to hero article].

 

Of all the clients we advise, business owners planning exit are the cohort with the most at stake from this Budget — and, paradoxically, the cohort with the most preserved.

The small business CGT concessions were untouched. That is the single most important fact in this entire article. The 15-year exemption, the 50% active asset reduction, the retirement exemption and the small business rollover all continue in their current form. For an eligible business sale, the combination of these concessions can still reduce the effective tax on the sale proceeds to near-zero, with substantial amounts contributable to superannuation under the CGT cap.

But — and the "but" is where the planning value sits — every structural decision around the business sale has changed.

•       The CGT treatment of growth in personal name or trust hands outside the small business concessions has changed

•       The treatment of discretionary trusts holding business assets has changed

•       The relative attractiveness of contributing sale proceeds into super has changed

•       The asset structure inside the business (premises, equipment, IP, goodwill) interacts with the new rules differently

•       The post-sale wealth deployment landscape has changed

For business owners with a sale anywhere in the next decade, the structural and timing decisions made between now and 1 July 2028 will determine whether the sale produces an optimised after-tax outcome — or whether years of business value evaporate into avoidable tax.

This article walks through the framework. As always, the principle holds: do not act on this article. Use it as the basis for a proper conversation with your adviser, your accountant and your lawyer.

 

For readers who are not currently familiar with the concessions in detail, a summary of what remains in place:

The basic conditions — to access any of the four concessions, the sale must satisfy:

•       An aggregated turnover threshold (currently $2 million for the small business test, or alternatively a $6 million maximum net asset value test)

•       The asset must be an "active asset" used in carrying on the business

•       For shares or trust interests, additional CGT concession stakeholder and 80% active asset tests apply

The four concessions:

1. The 15-year exemption. Where the owner is aged 55 or over and retiring (or permanently incapacitated), and the business asset has been continuously owned for at least 15 years and used as an active asset for at least half the period, the entire capital gain is exempt from CGT. The full proceeds (up to the lifetime CGT cap) can be contributed to superannuation under the small business CGT cap, outside the standard contribution caps.

2. The 50% active asset reduction. A 50% reduction in the assessable capital gain on the disposal of an active asset, applied in addition to the general CGT discount where applicable.

3. The retirement exemption. A capital gain on the disposal of an active asset can be disregarded up to a lifetime limit of $500,000 per individual. For taxpayers under 55, the exempt amount must be paid into a complying superannuation fund.

4. The small business rollover. A capital gain on the disposal of an active asset can be deferred where a replacement active asset is acquired within two years.

These four concessions remain in their current form. The Budget did not narrow them, did not introduce new eligibility hurdles, and did not change the lifetime caps. For business owners eligible to access them — most genuine small business sales — the after-tax outcome of an optimised sale remains exceptional.

 

While the concessions themselves are preserved, several elements of the broader landscape have shifted.

 

For larger business sales, the concessions may not cover the entire gain. The 50% active asset reduction halves what's left after the 15-year exemption (which may not apply) and the retirement exemption (capped at $500,000). The residual gain falls under the general CGT regime — and from 1 July 2027, that regime is the new indexed-plus-30%-minimum system.

For a business sale producing $5 million of capital gain where the 15-year exemption does not apply:

•       Retirement exemption: removes $500,000

•       50% active asset reduction: halves the remainder

•       Residual assessable gain: substantial

•       Under the new rules, the residual is taxed under the indexed regime at marginal rate, subject to the 30% minimum

The previous system's 50% general CGT discount would have applied a further reduction. The new system does not. For larger sales, this can mean meaningful additional tax.

Planning implication: for business owners with a sale value likely to exceed the concession caps, the timing of the sale matters more than it did. A sale completing before 30 June 2027 captures the 50% general discount on the residual gain. A sale completing after 1 July 2027 captures the indexed regime.

This is not an argument for rushing a sale. It is an argument for not delaying a sale that could otherwise be completed sooner, where the commercial readiness aligns.

 

A large number of Australian small businesses operate through discretionary trust structures. The new 30% minimum tax on discretionary trusts from 1 July 2028 raises a specific question for business owners: should the trading entity remain a trust, or should the business be restructured into a company through the three-year rollover relief window (1 July 2027 to 30 June 2030)?

The decision is more complex than the tax arithmetic suggests:

Arguments for retaining the trust:

•       The small business CGT concessions interact with trust structures in particular ways (CGT concession stakeholder requirements, distribution patterns to demonstrate small business participation)

•       Trusts continue to offer asset protection and succession flexibility

•       For sales completing during the rollover window, the tax saving on retained earnings may not justify the restructure cost

Arguments for restructuring into a company:

•       The 30% minimum tax floor disappears

•       Retained earnings inside a 25% small business company are tax-efficient for ongoing reinvestment

•       For businesses likely to be sold to a corporate purchaser, the company structure may be a cleaner sale vehicle

•       The CGT and income tax rollover relief specifically permits this restructure without tax friction during the window

The integrated answer: the right structure depends on when you plan to sell, how the sale is likely to be structured (asset sale vs share sale), who the likely purchaser is, the size of the gain, and the eligibility for small business concessions. There is no universal answer — and this is precisely the kind of decision where premature commitment, or premature reaction to the headline, produces poor outcomes.

 

Under the small business CGT cap, eligible proceeds from a qualifying business sale can be contributed to superannuation outside the standard concessional and non-concessional caps, up to a lifetime limit (indexed annually; check current limits in any specific advice). This has always been one of the most powerful wealth concessions in Australian tax law.

What changed with this Budget is the relative value of getting money into the super environment. As covered in detail in article 4 of this series, the new rules outside super have made super disproportionately more attractive as a long-term wealth structure. For a business owner with eligible sale proceeds, using the small business CGT cap to move substantial amounts into super is more valuable in 2027 than it would have been in 2024.

Planning implication: the year-of-sale planning needs to integrate the use of the small business CGT cap with other super contribution strategies (concessional, carry-forward, non-concessional, bring-forward, downsizer where applicable). Done well, the combined use of these provisions can move multiple millions of dollars into the super environment in a single year, with negligible tax friction.

This is exceptional planning leverage — and it requires careful sequencing across the financial year.

 

The reintroduced loss carry-back for companies with turnover up to $1 billion is a useful technical provision for business owners. Where a company experiences a loss year (perhaps due to a one-off event, a wind-down phase before sale, or a strategic decision), the loss can be carried back against tax paid in the prior two income years, generating a cash refund.

For business owners in the wind-down or pre-sale period, this can be a useful cash management tool — particularly where the business is being prepared for sale and some year-on-year variability is expected.

 

Two smaller measures bear mention because they help with cash flow management in the run-up to sale:

•       The permanent $20,000 instant asset write-off (for businesses with turnover under $10m) supports investment in plant and equipment without compromising tax timing

•       More flexible PAYG instalment rules from 1 July 2027 reduce friction in managing tax cash flow during variable income periods

For owners managing a business toward sale across several financial years, these provisions support cleaner cash flow profiles in the run-up.

 

For business owners planning a sale anywhere in the next decade, the planning timeline breaks into roughly five phases. Each phase has different priorities and different decisions.

 

The most important decisions to make in this phase relate to structure:

•       Confirm or establish eligibility for the small business CGT concessions (review the basic conditions, the aggregated turnover test, the maximum net asset value test, the active asset test, and where relevant, the CGT concession stakeholder requirements)

•       Resolve any structural inefficiencies that would compromise concession eligibility (intermingled assets, unclear ownership, related-party transactions, undocumented loans)

•       Assess whether the current operating structure (typically a trust, company, or partnership) remains the right vehicle through to sale

•       Where the trading entity is a discretionary trust and a restructure into a company is being contemplated, begin planning for use of the 1 July 2027 to 30 June 2030 rollover window

•       Bring valuation, financial reporting and management reporting up to "sale-ready" standard

For business owners 5+ years from sale, this phase is about creating optionality. The work done now determines what is possible later.

 

This is the year of maximum policy transition. Two specific developments deserve attention:

•       The new CGT rules take effect from 1 July 2027 for all post-2027 gains

•       The trust restructure rollover relief becomes available from 1 July 2027

For business owners with a sale planned in this window or shortly after, the year-of-transition introduces complications around split-treatment apportionment and the interaction between the old and new CGT systems. Specialist advice in this period is non-negotiable.

For business owners with a sale planned later (2030–2035), this is the window in which a trust-to-company restructure can be executed with rollover relief. Earlier in the window is better than later — the 30 June 2030 close creates a predictable end-of-window rush, and executing restructure under deadline pressure produces worse outcomes than executing it methodically.

 

The 30% trust minimum tax begins. For business owners whose trading entity remains in trust form, the new tax becomes a live operating cost.

The strategic implications:

•       The economics of retaining the trust as the operating entity tighten

•       The case for the rollover restructure (where appropriate) strengthens

•       Income deployment strategies — distribution patterns, bucket company use, retention — all require fresh modelling

 

In the final 12–24 months before sale, the focus shifts to sale execution and tax sequencing:

•       Engage corporate advisers (M&A specialists, lawyers, sell-side accountants)

•       Conduct vendor due diligence to identify and resolve issues before the buyer finds them

•       Optimise the financial profile (normalisations, working capital, debt structure)

•       Engage tax advisers to map the after-tax outcome under multiple deal structures (asset sale vs share sale, earn-outs, deferred consideration)

•       Plan the year-of-sale super contribution strategy in detail

•       Prepare for the wealth deployment phase (what happens to proceeds post-sale)

 

The sale itself is one event. The wealth deployment that follows is often a multi-year process and is frequently where avoidable mistakes are made. The post-sale period typically involves:

•       Executing the small business CGT cap super contributions

•       Deploying remaining proceeds across asset classes (often a mix of super, personal portfolio, property, fixed income, lifestyle assets)

•       Establishing or rebalancing investment structures (trusts, SMSFs, companies, personal portfolios)

•       Estate planning review

•       Income strategy for the next 5–25 years

•       Aged care funding planning (covered in article 7 of this series)

The single biggest mistake we see in this phase is clients investing too much, too fast, in unfamiliar asset classes. The proceeds of a business sale are typically the largest single liquidity event in a client's life. The right pace is measured, not rushed.

A construction services business, owned 100% by the founder (now 58), operating through a family discretionary trust. Currently profitable at $480,000 annual EBITDA, expected sale value in 5 years of approximately $3.5–4.0 million.

The planning priorities:

•       Confirm small business eligibility now. The aggregated turnover is well within the $2m test, but the owner needs to confirm CGT concession stakeholder requirements are met at the trust level. This is preparatory work to be done now, not at the time of sale.

•       15-year exemption pathway. The business has been owned for 11 years. By the time of sale at age 63, the 15-year ownership test will be satisfied. The 15-year exemption is the cleanest and most valuable concession available, and the owner is well-positioned to access it.

•       Trust restructure question. With sale planned for 2031, the rollover relief window (1 July 2027 to 30 June 2030) becomes highly relevant. The owner has the option of converting the trust to a company structure within the window. Whether this is the right move depends on the likely sale structure — for a share sale, the company form may be cleaner; for an asset sale, less material.

•       Super contribution planning. In the year of sale, full use of the concessional cap, carry-forward concessional capacity, the small business CGT cap super contribution, and (where eligible) bring-forward non-concessional contributions can move very substantial amounts into the super environment. This is the year of maximum super leverage and warrants meticulous planning.

The decision today: start the structural preparation now, monitor the rollover window for the trust restructure decision, and engage corporate advisers 12–18 months before the planned sale.

 

A professional services practice owned by the founder (now 52), operating through a company, expected sale value in 10 years of approximately $2.0–2.5 million.

The planning priorities:

•       15-year ownership eligibility at sale. At sale at age 62, the owner will easily satisfy the 15-year continuous ownership test. The 15-year exemption is the central planning anchor.

•       Active asset and stakeholder tests. For shares in a company, additional tests apply — particularly the 80% active asset test and the CGT concession stakeholder rules. These need to be designed for and monitored over the next decade.

•       Super accumulation. With 10 years to sale, the owner has substantial time to use the concessional cap, carry-forward provisions (while balance is under $500,000), and bring-forward non-concessional contributions to build the super balance — magnifying the impact of the year-of-sale small business CGT cap contribution.

•       Personal investment strategy. Outside super, the new CGT and trust rules affect the build-up of personal wealth over the 10-year horizon. Asset placement decisions (which investments held in which structures) become more strategic.

The decision today: the sale is far enough out that no immediate structural action is required, but the supporting wealth strategy can begin to optimise for the eventual exit now.

 

A wholesale distribution business, owned for 25 years, operating through a company. Expected sale value in 2 years of approximately $6.5–7.0 million.

The planning priorities:

•       15-year exemption clearly accessible. With 25 years of ownership and the owner clearly in the retirement window, the 15-year exemption is available. This is the most valuable concession and applies to the full eligible gain.

•       Sale value exceeds concession coverage. For a $6m+ sale, the concessions may not cover the entire gain. The residual will fall under the new CGT rules from 1 July 2027 — and with sale planned for 2028, this is firmly in the new regime.

•       Timing the sale. If commercial readiness allows, a sale completing in the 2026–27 financial year captures the old 50% discount on the residual gain. Pushing into 2027–28 captures the new indexed regime. This is a decision worth modelling carefully — not because the new rules are catastrophic, but because the planning value is meaningful.

•       Year-of-sale super strategy. Full use of the small business CGT cap, combined with concessional, carry-forward and non-concessional contributions, can move $2m+ into the super environment in the year of sale.

•       Wealth deployment planning. With proceeds of this magnitude, the post-sale planning is at least as important as the sale tax planning. Estate, family succession, ongoing income strategy and aged care planning all warrant serious attention.

The decision today: engage corporate advisers and tax specialists immediately; model the timing-of-sale question carefully; begin building the post-sale wealth deployment plan now, not after settlement.

In the conversations we have had with business-owner clients over the past two decades, the patterns of mistake are consistent. They are amplified — not changed — by the new rules.

Mistake 1: Treating tax planning as a sale-year exercise.

By the time the sale is 6 months away, most of the optimisation opportunity has already been foreclosed. Structural eligibility for the small business concessions, CGT concession stakeholder requirements, asset placement, super balance — all need to be built in the years before sale, not in the months.

Mistake 2: Wrong structure, recognised too late.

Operating through a structure that is suboptimal for the eventual sale is one of the most expensive mistakes a business owner can make. Where restructure is required, the rollover relief window (where applicable) and time-based planning are critical. Discovering the structural issue in due diligence is too late.

Mistake 3: Ignoring the post-sale environment.

The sale itself is one event. The wealth deployment that follows can run for 20+ years. Far too many business owners spend years planning the sale and weeks planning what comes next — usually because the sale process is consuming and the post-sale planning gets deferred. The opposite priority is more often correct.

Mistake 4: Not using super to its full leverage in the sale year.

We have seen clients with $5m+ sales who failed to use even the basic concessional cap, let alone the small business CGT cap and the broader contribution stack. The leverage left on the table is consistently in the hundreds of thousands of dollars.

Mistake 5: Selling at the wrong time for the wrong reason.

A handful of clients are now considering accelerating a sale to "beat" the CGT changes. As with the property version of this mistake, accelerating a sale that is not commercially ready usually produces a worse net outcome than waiting for the right buyer at the right value. The tax saving from beating a deadline does not compensate for a 15% lower sale price.

Mistake 6: Not engaging integrated advisers.

A business sale is the intersection of tax law, corporate law, financial planning, succession planning, and family considerations. Using a single adviser — accountant, lawyer or financial adviser — in isolation usually produces gaps. The most successful sales we have advised on have involved tightly integrated teams across these disciplines.

 

Our Federal Budget Strategy Reviews for business owners with planned sales include:

•       Confirmation of small business CGT concession eligibility under current and projected circumstances

•       Structural review including the trust-to-company restructure decision under rollover relief where relevant

•       Sale-year tax optimisation modelling across multiple deal structures

•       Comprehensive super contribution strategy in the lead-up to and including the year of sale

•       Post-sale wealth deployment planning — investment, estate, succession, lifestyle

•       Coordination with corporate advisers, tax specialists, lawyers and (where relevant) M&A advisers

•       For complex sales, multi-year written advice with documented decision rationale

The depth of work required for a properly optimised business sale is significant — typically several months of preparation, multiple integrated adviser engagements, and ongoing review through to settlement. The value created by this work, on a typical small-to-mid business sale, runs from low six figures to substantial seven figures in after-tax outcome.

 

The small business CGT concessions remain one of the most valuable provisions in Australian tax law. They survived this Budget intact. For business owners with a sale anywhere in the next decade, the opportunity to access them remains as valuable as ever — provided the structural and timing decisions are made deliberately, well in advance of sale.

The mistake to avoid is treating the unchanged concessions as a reason for complacency. The landscape around the concessions has shifted significantly. The cost of suboptimal structure, suboptimal timing or suboptimal post-sale planning has gone up.

The clients who emerge from this period with the best outcomes will be the ones who started planning early, engaged integrated advice, used the rollover relief window deliberately where appropriate, maximised the year-of-sale super leverage, and treated the post-sale environment as seriously as the sale itself.

A business sale is the single largest wealth event most owners will experience. It deserves the planning effort that magnitude implies.

 

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Upcoming articles:

•       The Pre-Retiree's Playbook: Navigating Budget 2026 in Your 50s and 60s

•       Aged Care, Estate Planning and the Sandwich Generation

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wealtheffectgroup.com.au | SMSF trustees: wesmsf.com.au | $5m+ investable assets: weprivate.com.au

Andre Dirckze is the Principal Adviser of Wealth Effect Group, a national Australian financial advice business with offices in Melbourne and the Gold Coast.

 

This article contains general information only and does not take into account your personal objectives, financial situation or needs. It is not personal financial, tax, legal or investment advice. The small business CGT concessions involve complex eligibility tests and interactions with other tax provisions; the application to any specific business sale requires detailed professional advice. The information is based on the 2026–27 Federal Budget announcements and the existing small business CGT regime; legislation has not yet been enacted for several of the broader Budget measures referenced. Before acting on any of the strategies referenced — including any decision to sell, restructure, contribute to superannuation or commence sale preparation — you should seek personal advice from a licensed financial adviser, registered tax agent, qualified legal practitioner and (where appropriate) corporate adviser who can consider your full circumstances. Wealth Effect Group Pty Ltd and its related entities accept no liability for any loss or damage arising from reliance on this article.