--- title: Updates to Budget Measures and New Developments description: Explore the latest changes to Australia's tax system, including CGT updates, minimum tax rates for trusts, and SMSF borrowing restrictions. Stay informed. image: https://insights.wlm.com.au/hubfs/Updates%20to%20Budget%20Measures%20and%20New%20Developments.png --- [![WLM_Logo_RGB_Orn50](https://insights.wlm.com.au/hs-fs/hubfs/WLM_Logo_RGB_Orn50.png?width=521&height=169&name=WLM_Logo_RGB_Orn50.png "WLM_Logo_RGB_Orn50")](http://wlm.com.au/) - [About](https://www.wlm.com.au/about/) - [Services](https://www.wlm.com.au/services/) - [Tax & Compliance](https://www.wlm.com.au/services/tax-and-compliance/) - [Strategy & Advice](https://www.wlm.com.au/services/strategy-and-advice/) - [Clients](https://www.wlm.com.au/clients/) - [Construction & Trades](https://www.wlm.com.au/clients/construction/) - [Family Business](https://www.wlm.com.au/clients/family-business/) - [Insurance & Financial Services](https://www.wlm.com.au/clients/insurance-and-financial-services/) - [Renewable Energy & Environment](https://www.wlm.com.au/clients/renewable-energy-and-environment/) - [Service-based & Other Business](https://www.wlm.com.au/clients/service-based-and-other-business/) - [Insights & Case Studies](https://insights.wlm.com.au/blog) - [Blog](https://insights.wlm.com.au/blog) - [Buying a property with a business partner](https://explore.wlm.com.au/buying_a_property_with_a_business_partner_download) - [How to minimise tax & risk with business structure](https://explore.wlm.com.au/business-structure-whitepaper-download) - [Contact](https://www.wlm.com.au/contact/) [Login](https://clientlogin-us2.karbonhq.com/4Frhz6cPZq6r) - [About](https://www.wlm.com.au/about/) - [Services](https://www.wlm.com.au/services/) - [Tax & Compliance](https://www.wlm.com.au/services/tax-and-compliance/) - [Strategy & Advice](https://www.wlm.com.au/services/strategy-and-advice/) - [Clients](https://www.wlm.com.au/clients/) - [Construction & Trades](https://www.wlm.com.au/clients/construction/) - [Family Business](https://www.wlm.com.au/clients/family-business/) - [Insurance & Financial Services](https://www.wlm.com.au/clients/insurance-and-financial-services/) - [Renewable Energy & Environment](https://www.wlm.com.au/clients/renewable-energy-and-environment/) - [Service-based & Other Business](https://www.wlm.com.au/clients/service-based-and-other-business/) - [Insights & Case Studies](https://insights.wlm.com.au/blog) - [Blog](https://insights.wlm.com.au/blog) - [Buying a property with a business partner](https://explore.wlm.com.au/buying_a_property_with_a_business_partner_download) - [How to minimise tax & risk with business structure](https://explore.wlm.com.au/business-structure-whitepaper-download) - [Contact](https://www.wlm.com.au/contact/) # News, views and more ![Dan McGrath](https://insights.wlm.com.au/blog/Dan%20McGrath) **Dan McGrath** 16 July 2026 — 2 min read ### Share [mailto:?subject=Updates%20to%20Budget%20Measures%20and%20New%20Developments&body=https://insights.wlm.com.au/blog/updates-to-budget-measures-and-new-developments](mailto:?subject=Updates%20to%20Budget%20Measures%20and%20New%20Developments&body=https://insights.wlm.com.au/blog/updates-to-budget-measures-and-new-developments) [mailto:?subject=Updates%20to%20Budget%20Measures%20and%20New%20Developments&body=https://insights.wlm.com.au/blog/updates-to-budget-measures-and-new-developments](mailto:?subject=Updates%20to%20Budget%20Measures%20and%20New%20Developments&body=https://insights.wlm.com.au/blog/updates-to-budget-measures-and-new-developments) ![Updates to Budget Measures and New Developments](https://insights.wlm.com.au/hubfs/Updates%20to%20Budget%20Measures%20and%20New%20Developments.png) ## Updates to Budget Measures and New Developments Since the Federal Treasurer handed down the 2026-27 Federal Budget on 12 May 2026 there has been a significant amount of commentary on some of the more controversial proposals, including the decision to replace the CGT discount with an indexation system and impose a 30% minimum tax rate on discretionary trusts. Since our latest update in this area, the Government has announced some changes to these proposals, as well as some other areas of the tax system that weren’t initially impacted by the Budget. ### CGT Changes On Budget night the Treasurer announced that the existing 50% CGT discount for individuals and trusts would be replaced with an indexation system and a 30% minimum tax rate on capital gains accruing from 1 July 2027 (with limited exceptions). However, the Government has announced that it plans to introduce a new *Innovative Business CGT Concession* that would provide a 50% CGT discount to early-stage investors, including founders and employee share scheme participants in innovative start-up businesses. A consultation paper has been released on the design of this concession. In addition, the Government is taking steps to increase the annual turnover threshold that applies in determining whether a small business or its owner can access the existing 50% “active asset reduction” under the small business CGT concessions, from $2m to $10m. This change would apply from 1 July 2027. The existing $2m turnover threshold would remain in place for the other three small business CGT concessions, being the 15 year exemption, retirement exemption and small business rollover relief. Taxpayers who can’t pass the turnover test can still access the concessions if they can pass a $6m net asset value test. ### Testamentary Trusts In the Budget the Government announced that a 30% minimum rate of tax would apply to the net taxable income of discretionary trusts from 1 July 2028. The Government had indicated that this would apply to testamentary trusts, unless they already existed at 12 May 2026. However, the Government has announced that it will now exempt income from all testamentary trusts from the new minimum tax rate rules, as long as they are established for “genuine testamentary purposes”. The exclusion from the rules will be limited to income from assets of the relevant deceased estate. For discretionary testamentary trusts established on or after 1 July 2028, the exclusion will only apply to trusts that can only benefit individuals and income tax exempt entities. ### SMSF Borrowing Arrangements As a result of negotiations with the Greens in connection with the changes to the CGT discount and negative gearing, the Government has agreed to remove the ability for SMSFs to borrow to purchase residential property (SMSF borrowing is commonly known as a limited recourse borrowing arrangement). It seems that existing arrangements will be grandfathered. ### Contact us If you’d like to understand how these changes may affect your [business](https://www.wlm.com.au/services/tax-and-compliance/) or tax position, [contact WLM](https://www.wlm.com.au/contact/) to discuss your circumstances with one of our advisers.  [![Under the ledger podcast 2026 budget unpacked](https://hubspot-no-cache-ap1-prod.s3.amazonaws.com/cta/default/6037207/17ada09a-7fe3-4194-88fd-9a7097e9ef81.png)](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/6037207/17ada09a-7fe3-4194-88fd-9a7097e9ef81) ##### Make a comment [Previous](https://insights.wlm.com.au/blog/ato-targets-personal-services-income-is-your-business-at-risk) [Next](https://insights.wlm.com.au/blog/super-on-payday-fundamental-changes-for-your-business) ## Wealth matters. Ask us how we can help you boost yours. 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