Albanese and Chalmers unveil tax breaks for startups, small businesses
- 10 hours ago
- 2 min read
The federal government has announced changes to its proposed capital gains tax reforms, offering additional relief for startup founders, employees, and early-stage investors.
The move follows criticism from the startup and small business sectors, which warned the original plan could discourage investment and slow innovation.
Under the revised approach, more small businesses will qualify for the 50 per cent active asset discount. The eligibility threshold will rise from businesses with turnover up to $2 million to those earning up to $10 million.
This discount applies on top of the standard 50 per cent capital gains tax concession when selling a business or business assets.
At the same time, Labor is proposing to replace the existing capital gains tax discount with a new inflation-linked model. However, startups may be offered a choice between the traditional 50 per cent discount or the new system, depending on eligibility.
The carve-out is expected to cover “new, innovative” companies, including founders, early-stage investors, and employees who receive shares as part of their pay.
Treasurer Jim Chalmers said the changes aim to improve certainty for investors and provide stronger support for small businesses and innovation.
The government has also adjusted its broader tax package after concerns were raised about plans to include certain discretionary testamentary trusts in a new 30 per cent tax measure.
While some trusts will remain exempt, critics argued the original proposal risked being seen as a “death tax.” The government says safeguards and anti-avoidance rules will address those concerns.
In response, Labor will also limit the Treasurer’s discretion over key definitions in the legislation, including what qualifies as a new home and which exemptions apply.
The changes are aimed at easing political concerns and improving the chances of passing the reforms through the Senate in the upcoming sitting period.
Source : ABC News
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