Let\u2019s look at what small businesses and startups stand to gain from the CGT carve-outs.<\/p>\n
Capital Gains Tax carve-out for small businesses<\/h2>\n
The changes to CGT will remove the 50% discount on capital gains from the sale of an asset held for 12 months, and replace it with cost-based indexation. The carve-out for small businesses does not change this; instead, it raises the turnover threshold from $2 million to $10 million for the 50% active asset reduction.<\/p>\n
The asset reduction allows businesses to effectively halve the amount of capital gain to be taxed. For instance, say a business that meets the requirements sells an active asset for a capital gain of $20,000: that business would only have to pay the calculated CG tax on $10,000.<\/p>\n
The change means that 2.7 million active small businesses and 98% of all active Australian businesses will have access to this concession. The threshold increase also opens the door for these small businesses to access the other CGT concessions:<\/p>\n
- \n
- Small business 15-year exemption:<\/strong> Disregard the entire capital gain from an asset sale. Sale proceeds can also be contributed to super, though a cap applies.<\/li>\n
- Retirement exemption:<\/strong> Disregard the gain up to a lifetime cap of $500,000 per individual.<\/li>\n
- Rollover:<\/strong> Defer a gain by rolling into a replacement active asset or capital improvement of another asset.<\/li>\n<\/ul>\n
The $10 million turnover threshold is just one eligibility requirement for these concessions, and applicants must meet additional criteria to qualify for all of them. For more information, the ATO has outlined the full CGT concessions requirements<\/a>.<\/p>\n
Carve-outs for Startups<\/h2>\n
The government has opened consultation on CGT concession arrangements for early-stage investors in startups. This includes founders and participants in employee share schemes. The proposed Innovative Business CGT concession scheme will allow individuals, partnerships, and trusts holding eligible shares to choose between the 50% CGT discount or cost-based indexation and the minimum 30% for capital gains accrued from 1 July.<\/p>\n
Contents of the proposed scheme:<\/strong><\/p>\n
- \n
- Must be newly issued shares (equity) in a company that is under 10 years old with a turnover of under $50 million.<\/li>\n
- Meets the principles-based innovation criteria.<\/li>\n
- A five-year minimum holding period of shares.<\/li>\n
- A $10 million lifetime cap on gains eligible for the concession.<\/li>\n<\/ul>\n
What the carve-outs mean for small businesses and startups<\/h2>\n
As with tax reform, there will always be those who aren\u2019t happy with the changes and those who are; the carve-outs at least address valid questions about small-business and startup support. For small businesses, the expansion of the CGT concessions threshold provides tax breaks to millions of businesses, whereas the startup carve-out in the Innovative Businesses scheme provides an incentive for risk-taking, albeit in specific circumstances.<\/p>\n
Small businesses<\/h3>\n
Making the CGT concessions accessible to small businesses with a turnover of under $10 million is a good policy. It sets a realistic, modern earnings threshold that, according to the government\u2019s modelling, will provide generous tax breaks to 2.7 million small businesses in Australia. The original threshold was set 20 years ago and has been outpaced by inflation and by businesses’ earnings capacity today.<\/p>\n
Startups<\/h3>\n
The Innovative Business CGT concessions for startups are a different story. The carve-out proposal addresses capital gains earned when no cost basis can be derived and incentivises risk-taking businesses. Access to the 50% discount on CGT seems generous until the eligibility requirements are considered: there is a lifetime cap of $10 million, only on issued shares of a company with a turnover under $50 million, and the shares have been held for at least 5 years. Those are very specific requirements that maybe only a few can meet.<\/p>\n
At any rate, the contents of the scheme are under consultation with the government and the Australian Startup community. The other concessions, such as the loss carryback scheme and loss refundability for startups, proposed in the budget do help mitigate risk.<\/p>\n
Small businesses and the 2026 Budget<\/h2>\n
The expansion of the threshold for small-business CGT concessions provides much-needed support for Aussies running a business. The vast majority (98%) of all active businesses in Australia should be eligible for the 50% asset-reduction concession, which allows small businesses to retain more of their gains from a sale. Couple this with the other small business benefits in the Federal Budget<\/a>, such as the $20,000 Instant Asset Write-Off tax scheme.<\/p>\n
For startups, positives can be drawn from the whole picture of what the budget provides: the loss carryback scheme, the loss refundability scheme, and the announced innovative business scheme. All these together provide support for risk-taking ventures.<\/p>\n
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Learn how CGT carve-outs and exemptions for small business and startups work, including eligibility, benefits, and 2026 Budget changes.<\/p>\n","protected":false},"author":36,"featured_media":306409,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"
Is your small business a great place to work? Reckon is! For 2024-2025, Great Place To Work has stamped its seal of approval and determined that Reckon is an industry leader in nurturing our employees and providing a safe workplace.<\/span><\/p>
So, who is Great Place To Work, and how did Reckon measure up?<\/span><\/p>
About Great Place to Work<\/b><\/h2>
Great Place To Work<\/span><\/a> is an industry body that consults on workplace management and provides certifications for businesses of all sizes on their capacity to offer a great working environment.<\/span><\/p>
Great Place To Work has reviewed the workplace culture and practices of many Australian businesses and developed a model that determines what is average, to good or great place to work. They don't share this model, but they hint at a few key indicators that are considered, such as leadership, experience, culture, and performance.\u00a0<\/span><\/p>
How to make a good company culture<\/b><\/h2>
How the workplace thrives at Reckon starts with our Head of People & Culture, Jessica Morris. Here is what she had to say about our certification:<\/span><\/p>
I\u2019m absolutely thrilled to share that we\u2019ve been officially certified as a Great Place to Work! This recognition is a testament to the incredible culture we have here at Reckon. The team's dedication, authenticity, and camaraderie have been the driving force behind our success, and we can all be proud of it.\u00a0<\/span><\/em><\/p>
Reckon isn\u2019t your typical software company. We are smaller, close-knit, and share the same values you won\u2019t find in a bigger organisation. Everyone is encouraged to be themselves and given the opportunity to find success in their roles. It\u2019s a real privilege to work here.\u00a0<\/span><\/em><\/p>
I\u2019d like to give a big thank you to each of our employees for making our company a fantastic place. Together, we\u2019ll continue to build an environment where everyone has the opportunity to thrive and grow.<\/span><\/em><\/p>
So, how does Reckon stack up against the rest?\u00a0<\/span><\/p>
![\"\"](\"https:\/\/www.reckon.com\/au\/wp-content\/uploads\/2024\/09\/Untitled-600-x-200-px-1-300x105.png\")
<\/p>How Reckon scored<\/b><\/h2>
So, what is the industry standard for a good workplace? Several factors contribute to a great workplace, but ultimately, it comes down to a shared company culture and values that management and employees agree on. Through Great Place To Work\u2019s modelling, <\/span>Reckon differentiates itself from the typical Aussie company<\/span><\/a>.<\/span><\/p>
Although Great Place To Work doesn\u2019t provide access to their modelling, it shows where you scored best.<\/span><\/p>
![\"\"](\"https:\/\/www.reckon.com\/reckon-blog\/wp-content\/uploads\/2024\/09\/Graph-300x200.png\")
<\/p>Justice\u00a0<\/b><\/h3>
Our highest score was in justice, at <\/span>96%<\/strong>. Justice is the extent to which employees perceive management promotes inclusive behaviour and ensures fairness.<\/span><\/p>
Leadership behaviour<\/b><\/h3>
- Retirement exemption:<\/strong> Disregard the gain up to a lifetime cap of $500,000 per individual.<\/li>\n