$20,000 instant asset write-off: a small business guide for 2026–27

Published 2 October 2026 · Stewart Private Accounting

The May 2026 Federal Budget announced a 30% minimum tax on certain discretionary trust income from 1 July 2028. Treasury subsequently released a July consultation paper and September exposure draft legislation. For a family business, the issue is how the proposed rules would affect distributions, cash flow and the reasons for using the trust.

Status at 2 October 2026: this article explains the exposure-draft proposal, not a minimum trust tax already operating. The Treasury draft legislation and explanatory materials were released on 3 September, with consultation closing on 18 September 2026. Final provisions and administrative arrangements may change.

Would every family trust pay 30%?

The draft targets defined minimum-tax trusts and relevant net income, with exclusions. A structure being called a “family trust” does not settle whether it is caught. Review the deed, beneficiary rights, income sources and any exclusions rather than relying on its trading name or a general description.

Under the proposed core arrangements, the trustee would pay the minimum tax. Non-corporate beneficiaries would generally receive a non-refundable offset for the trustee tax attributable to their share. The tax is a floor, so it does not cap a high-income beneficiary’s total tax at 30%. Corporate beneficiaries have different treatment. These mechanics are explained in the draft minimum-tax explanatory materials.

Why does the proposal matter for cash flow?

A trust that currently allocates income to adult beneficiaries on lower marginal rates may lose some of that tax benefit. The trustee would also need cash available to meet its proposed liability, rather than assuming every dollar can be distributed or reinvested.

As a simplified illustration, $100,000 of income wholly subject to a 30% minimum implies a $30,000 minimum tax amount. That is not automatically an additional $30,000 on top of all existing tax. Existing trustee tax, beneficiary offsets, excluded income and credits affect the outcome. Use a forecast based on the trust’s actual income and beneficiaries, rather than multiplying its gross sales by 30%.

Which trusts and income would be excluded?

The September proposal provides exclusions for relevant fixed trusts, complying superannuation entities, special disability trusts and deceased estates. It also provides for excluded income, including qualifying primary production income, certain income relating to vulnerable minors and genuine testamentary trust income. Charitable and other exempt beneficiaries have specific rules.

These exclusions have conditions. A trust earning farming income and investment income should not assume every dollar is exempt. Nor does a unit trust automatically qualify as a fixed trust merely because it has units. The proposed fixed-trust definition looks at the substance of beneficiary entitlements and material discretionary elements.

What is the new fixed-distribution election?

The September draft adds an alternative to restructuring for discretionary trusts in existence at 1 July 2028. A trustee could elect to make fixed distributions to pre-nominated beneficiaries and be excluded from the minimum tax regime. The Treasury exposure-draft factsheet explains the option.

This would exchange distribution flexibility for greater certainty. Changing nominated beneficiaries is restricted, and inconsistent distributions can automatically revoke the election. Treasury’s draft outlines a highest-marginal-rate consequence, including Medicare levy, in the revocation year, followed by minimum-tax treatment in later years. It is therefore not a casual annual switch.

Before considering the election, test what would happen if family members’ incomes, ownership plans or relationships change. Review the draft election explanatory materials alongside the deed.

Would restructuring be tax-free?

Expanded rollover relief is proposed for three years from 1 July 2027 to help taxpayers move out of discretionary trusts, including into companies or fixed trusts. The relief has conditions and is designed around a full restructure, with targeted exceptions. It is not permission to move selected assets to family members without consequences.

Income tax rollover relief does not automatically remove state transfer duty, lender consent, legal costs or commercial obligations. For a Perth business or property owner, obtain a separate Western Australian duty assessment and legal review before transferring assets. Compare staying in the trust, an eligible election and a restructure using the same income and cash-flow assumptions.

How does this interact with CGT and company beneficiaries?

The CGT reforms from 1 July 2027 are a separate measure with an earlier start date. A trust restructure can raise both sets of questions. Treasury has also indicated that legislation concerning unpaid present entitlements and Division 7A will be progressed separately; distributing income to a company should not be treated as an automatic solution. See the September Treasury announcement.

What should trustees prepare now?

• The current trust deed and every amendment.
• Recent tax returns, accounts and distribution resolutions.
• Asset ownership, cost-base and loan records.
• Beneficiary balances, company entitlements and cash payments.
• A forecast of business, investment and excluded income.
• The family’s succession, asset-protection and funding objectives.

Continue meeting current distribution and reporting obligations while planning for the proposal. Our trust tax return guide covers existing records and deadlines. Discuss a trust planning review with Stewart Private Accounting so the options can be assessed against your circumstances and the legislation available at that time.

General information checked at 2 October 2026. Future law, eligibility and your circumstances can change the result. Obtain tax and legal advice before selling assets, amending a deed or restructuring.

Published 2 October 2026 · Stewart Private Accounting

The May 2026 Federal Budget announced major changes to capital gains tax. The core reform is now legislated, with new arrangements applying from 1 July 2027. For business owners and investors, the practical questions are which assets are affected, how earlier gains are treated and what records will support the calculation.

Status at 2 October 2026: the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 has passed. Further implementation details have been released through Treasury’s second-stage consultation. Do not assume every detail in a consultation draft is enacted.

What happens to the 50% CGT discount?

For affected gains accruing from 1 July 2027, the general 50% discount is replaced by cost-base indexation, subject to the rules and exceptions. Indexation adjusts the eligible cost base for inflation, so the calculation focuses on the real gain. The reform affects more than residential property: shares and other investments held by individuals and through relevant trusts can also be affected.

This is not a change that gives every company a new CGT discount. The entity holding the asset, the holding period, residency and available exemptions remain important. The Budget’s CGT and negative gearing explainer outlines the policy and examples.

Does “30% minimum tax” mean a flat 30% rate?

No. It is a minimum for relevant capital gains, rather than a cap. A person already paying tax above that rate does not automatically get their rate reduced to 30%. The legislation includes a calculation for any extra tax and exceptions for recipients of specified support payments. Eligibility depends on the actual payment received; being retired alone is not the test.

The minimum applies to the relevant taxable gain after the applicable adjustments, rather than to the asset’s sale proceeds. A $500,000 sale does not mean $150,000 of tax without considering the cost base, losses, exemptions and other requirements.

Are gains built up before 1 July 2027 protected?

The transitional arrangements separate the period before 1 July 2027 from the later period. Earlier gains can retain their existing treatment where the conditions are met. Holding an asset before Budget night does not, however, protect every future gain indefinitely.

For illustration, an investor bought an asset for $300,000, it is worth $420,000 at the transition date and it later sells for $500,000. Those figures identify two periods of growth: $120,000 before the transition and $80,000 afterwards, before indexation and other adjustments. This is a planning illustration, not a tax calculation or confirmation of the valuation method available for that asset.

Retain purchase documents, improvement costs, ownership history and evidence relevant to a transition-date value. Treasury’s second-stage materials address apportionment and special situations. Ask which records and valuation approach suit your asset before arranging a sale.

What about the main residence and new residential dwellings?

The main residence exemption remains, subject to its existing conditions. It is not a blanket exemption for a home used for business or rental purposes. Eligible new residential dwellings have special arrangements that can preserve access to the 50% discount. A property’s marketing label is not enough to establish eligibility.

Negative gearing is a separate reform with different transitional tests. In particular, its Budget-night acquisition rules should not be confused with the 1 July 2027 CGT transition.

Are small business CGT concessions disappearing?

No. The small business CGT concessions remain important. The general 50% CGT discount and the small business 50% active asset reduction are different concessions. The enacted amendments expand access to the active asset reduction by removing the specific $2 million turnover restriction for that concession; other conditions still need checking. Do not assume the same change applies to every small business CGT concession.

A business sale therefore needs an asset-by-asset and entity-by-entity review, including ownership, active use, shares or units, and the relevant concession conditions. The Treasury small business explainer gives additional context.

What should you do now?

• List investments and business assets, with acquisition dates and owners.
• Reconcile cost-base records and carried-forward capital losses.
• Identify proposed sales and the reasons for their timing.
• Review concession eligibility before negotiating a business sale.
• Model the CGT result separately from any proposed trust restructure.

Read our companion guide to the proposed discretionary trust minimum tax. Stewart Private Accounting can help assess the tax consequences through our tax planning services. Contact our Perth team with your asset and ownership records.

General information checked at 2 October 2026. Future law, eligibility and your circumstances can change the result. Obtain tax and legal advice before selling assets, amending a deed or restructuring.

Published 2 October 2026 · Stewart Private Accounting

If you operate through a private company, using its money for personal bills can create a tax problem even when you call the transaction a loan. Division 7A can treat certain payments, loans and forgiven debts involving shareholders or their associates as unfranked dividends. A regular review of owner transactions is more useful than trying to resolve a year’s drawings just before lodgment.

Why is company money different from sole trader drawings?

Your company is a separate entity. Being its director or shareholder does not make its bank account your personal account. Recording a private purchase as a business expense does not make it deductible or remove any Division 7A consequences. The ATO outlines the rules in Private company benefits – Division 7A dividends.

Division 7A is not a rule that every director transfer automatically breaches. The recipient, nature of the transaction, exceptions and company circumstances must be assessed. For example, a genuine repayment of money the company already owes you is different from a new advance by the company.

What transactions should you flag?

• Transfers from the company account to a personal account.
• Private mortgage, school-fee or holiday payments made by the company.
• Private costs on the company credit card.
• Loans to shareholders, family members or other associates.
• Use of company assets or a decision to forgive a related debt.

Keep the transaction visible in the records. Do not hide it in a general expenses account or assume a year-end journal will fix it.

What is the deadline for a new company loan?

A loan potentially caught by Division 7A generally needs to be repaid in full or placed on complying terms before the company’s lodgment day. That is the earlier of its tax return due date and the date it actually lodges. Early lodgment can therefore bring the deadline forward.

A complying written agreement must meet the relevant interest and term requirements. The usual maximum term is seven years, with a 25-year term available only where the specific registered real-property mortgage conditions are met. Do not assume that labelling an account “director loan” creates an agreement. The ATO’s Division 7A guidance on company loans explains the requirements.

Does an agreement remove the need for repayments?

No. Complying loans require minimum yearly repayments in subsequent income years, using the applicable annual benchmark interest rate. For a standard 30 June balancing business, those repayments need attention before 30 June, rather than the later tax return date. The ATO’s Division 7A calculator can assist with the calculation using the loan’s actual details.

Repaying a loan and then borrowing back from the company can cause the repayment to be disregarded. A paper entry without a genuine transaction may also fail. The ATO identifies these issues in its common Division 7A errors guidance.

A practical example

Imagine a shareholder uses $15,000 from their company for private expenses during 2025–26 and the balance remains owing. The accountant needs to examine the transactions and the company’s lodgment day before deciding whether repayment, a complying loan or another properly documented treatment is appropriate. If a complying loan is established, future interest and minimum repayments must also be managed. This illustration does not assume an automatic $15,000 dividend: exceptions and the company’s distributable surplus can affect the result.

What should you bring to a review?

Prepare company and personal transaction records, the loan ledger, existing agreements, repayment evidence and the tax return due date. Tell your accountant if you plan to lodge early. Salary, dividends, expense reimbursements and loan repayments each need their own correct treatment.

Our company accounting services and tax planning services can help identify owner balances and the actions needed. Contact Stewart Private Accounting before withdrawing company funds or finalising the return.

General information current at 2 October 2026. Your business structure, transactions and circumstances affect the outcome. Obtain advice before acting.