With the Budget changes now legislated, perhaps it’s time to consider more closely how they may affect you, and what you can do about it – especially in relation to the CGT discount changes.
So, looking at the CGT discount first, if you already own an asset you won’t be denied whether or not you sell before or after the key changeover date of 1 July 2027.
If you sell before that date, you will continue to get the full 50% CGT discount (provided you are and have been a resident of Australia for tax purposes).
If you sell on or after that date, you will continue to get the full 50% CGT discount up to its market value on 1 July 2027 and for any gain that accrues thereafter you will be subject to the indexation method of calculating your gain (and the new minimum 30% tax rate).
In short, you won’t be really penalised if you own an asset now and sell before or after that key date you will still get the discount up to that date. But then you will be subject to the new indexation method of calculating any gain and, more importantly, the new minimum 30% tax rate. This is where you may get penalised.
Therefore, if you are looking at realising a gain on an asset (eg shares) in an income year when you have little or no other assessable income so that your capital gain will get taxed at less than the 30% marginal tax – then you may want to think of doing that before 1 July 2027… because after that the minimum 30% tax rate will be imposed on your “raw” capital gain.
It’s a simple bit of planning but invaluable, provided you can structure things in the year ending 30 June 2027 to reduce your normal taxable income.
Conclusion
The legislated CGT changes mean timing now matters more than ever. While assets held before 1 July 2027 still benefit from the full 50% discount up to that date, any gain that accrues afterwards will be taxed under the new indexation rules and, critically, at a minimum 30% rate. For anyone considering a sale in a low‑income year, the window before 1 July 2027 may offer a meaningful tax advantage — but only if the timing is planned deliberately.
If you’re weighing up when to realise a capital gain, now is the right moment to review your position and model the impact of these new rules. Contact our experienced team at Regency Partners to discuss your circumstances and ensure you make the most of the opportunities available before the changeover date.
Disclaimer: The examples in this article are simplified and for general illustration only. Actual tax outcomes will depend on factors including the type of asset involved, the ownership structure, the date of acquisition, residency status, and the availability of specific exemptions or rollover relief. Professional advice should be sought before acting on any of the matters discussed.
