We want to flag something, because we think a lot of business owners may miss the window – or will they? We think the answer is Yes and No…….

A change is coming to how capital gains are taxed in this country, and the businesses that come out ahead will be the ones that quietly get things in order over the next twelve months. If you own a business through a trust, a partnership, or in your own name, this affects you directly, and we would rather you hear it early so you can decide to take any necessary action.

On 26 June 2026, the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received royal assent. Not a Budget line item anymore — law. From 1 July 2027, the 50% CGT discount that individuals, trusts and partnerships have built decades of wealth around is replaced with cost base indexation and a new 30% minimum tax on capital gains.

Which brings me to one of the questions we are beginning to be asked, and I suspect will be asked a lot more in the coming months: “Should I sell now, before the discount disappears?”

Our answer is usually no — or at least, not for that reason alone! This reform isn’t a cliff edge. It’s a line drawn through time, and the work that protects you isn’t necessarily a rushed sale – selling a business is rarely a 5-minute job. The new rules strongly suggest that you make sure you can prove exactly where you stood on the day the line was drawn.

How The Split Actually Works

Sell before 30 June 2027, and the existing 50% discount applies in full, no change. Hold past that date, and your gain is split into two eras. Everything accrued up to 1 July 2027 still gets the 50% discount. Everything accrued from that date is taxed under the new regime.

To draw that line, you need to establish what the asset was worth on 1 July 2027. To be clear you don’t need to make a decision by the deadline – it can be backdated. A valuation can be done retrospectively, even years later, as long as its objective and well supported. The Government has given taxpayers two paths: a formal valuation, or an ATO apportionment formula based on the asset’s growth rate and holding period.

A point of further clarity – there is no approved list of who can do these valuations they just need to be independent and objective. However, it is noted that a professional valuer is likely to provide more credibility should the ATO question the valuation.         

At Oasis we have watched enough businesses grow to know which path is likely to serve owners better. The formula assumes smooth, straight-line growth. Almost no business we’ve ever advised has grown that way. They plateau for a few years, then step-change on the back of a new contract, a market shift, or a well-timed acquisition etc. If that’s your business, a formula will very likely understate what you’re entitled to shelter under the old discount. A proper valuation captures what actually happened, not what a spreadsheet assumes should have happened.

Who This Touches

This lands on individuals, trusts and partnerships — which, in our experience, describes most of the private business owners we sit across the table from. Superannuation funds keep their existing discount. Companies were never in this regime to begin with. And the small business CGT concessions — the 15-year exemption, active asset reduction, retirement exemption, rollover relief — all survive, with the active asset reduction’s turnover threshold actually rising from $2 million to $10 million from FY2027-28.

What We Think

Don’t let a tax deadline dictate your exit timing — a rushed sale rarely serves the owner well. Finsing genuine strategic acquirers, capable of valuing fairly requires time and effort. For the record our average transaction timeline, start to finish, is 13 months – 39% of our deals are done in year 1 and 41% in year 2! Do treat the next twelve months as the window to get an objective and well-supported valuation on the books – market conditions will be current and the evidence is fresh. Years from now, that valuation may be the one document that quietly did more for you than any other piece of advice you paid for this year.

General commentary only, not personal tax advice — speak to your adviser about how these transitional rules apply to your specific circumstances.

At Oasis Partners, we’ve been unlocking value for the shareholders of private companies since 1984, and have completed over 500 successful deals — mainly acting for sellers. If you’re weighing up timing, valuation, or what your business is really worth heading into this transition, get in touch.