What the 2026/27 Federal Budget means for your business

On 12th May 2026, Treasurer Jim Chalmers handed down the 2026/27 Federal Budget and for Australian small business owners, there is a lot to unpack. From permanent tax relief to big structural changes around discretionary and testamentary trusts, the measures will shape how thousands of businesses plan, invest and grow from 1 July onwards.​

We have pulled it all apart so you do not have to.​

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This is a big win for small businesses, with the write-off available for those with a turnover of less than $10 million.​

Previously legislated on a year-by-year basis, the permanence provides greater certainty and capacity for businesses to be able to plan their capital spending.​

The government estimates this will save small businesses around $32 million per year in compliance costs alone.​

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From 1 July 2026, the government is permanently reintroducing the two-year loss carry-back for companies with a turnover of up to $1 billion. This means that if your company makes a tax loss in the 2026/27 financial year, you can offset it against tax you have already paid in the previous two years and receive a cash refund.​

Up to 85,000 Australian companies are expected to benefit, with the majority being small businesses.​

What to do: If your company has paid tax in the past two years and you are planning significant investment or facing a tough trading period, speak to your accountant about whether this measure will apply to you.​

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From 1 July 2028, the government will introduce a minimum 30% tax rate on distributions from Discretionary and Testamentary trusts.​

Currently, trust distributions can be spread across beneficiaries and taxed at each individual's marginal rate. Under the new rules, a baseline 30% tax will apply regardless of the recipient's marginal rate, with some exemptions including primary production income, charitable trusts, special disability trusts and complying superannuation funds. This means that taxpayers who are in lower marginal tax brackets will pay more tax.​

To support businesses that need to restructure, the government is providing rollover relief for three years from 1 July 2027. However, stamp duty may be payable on these restructures.​

What to do: While the rollover window gives you time to assess your structure, we’d recommend booking in a conversation with your accountant sooner rather than later. This is the type of decision that can be useful to make early rather than leaving it until the new rules come into effect.​

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If you’re a sole trader or have employees, the budget also delivers some relief.​

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From 1 July 2027, the 50% CGT discount for individuals, trusts and partnerships will be replaced by CPI cost base indexation plus a 30% minimum tax rate on real capital gains for assets held for longer than 12 months.​

Capital gains on pre-1985 assets arising before 1 July 2027 will remain exempt, while there is no impact to the exemptions for main place of residence.​

From 1 July 2027, negative gearing for residential property will be limited to new builds. Properties held before budget night (7.30pm AEST on 12 May 2026) will be exempt, meaning existing investors won’t be impacted by the changes.​

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The 100% FBT exemption for electric cars will be replaced with a 25% discount from 1 April 2029.​

All electric vehicles with a value less than $75,000 provided before 1 April 2029 will continue to be 100% FBT-exempt, while vehicles (up to the LCT fuel-efficient threshold) valued over $75,000 provided between 1 April 2027 and 1 April 2029 will have the new 25% FBT discount.​

From 1 April 2029, all eligible electric cars will have the 25% FBT discount applied.​

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From 1 July 2028, changes to R&D offsets are aimed at incentivising core research and development that benefits the broader economy.​

The changes include:​

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While the permanent instant asset write-off and the return of loss carry-back are meaningful wins for small and medium business owners, changes to discretionary and testamentary trusts and capital gains tax require greater planning and decision-making.​

At Beany, we are already across all of it. If any of this has raised questions, get in touch with your Beany accountant. If you’re not yet a client and looking for a new accountant, book a discovery call to find out more about working with us.​

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Please note that budget measures are only proposals until they have been formally passed into law. This can take months and sometimes even years, depending on planned implementation dates and timeframes.​

For all official information from the 2026/27 Federal Budget visit budget.gov.au​