In a response to some of the criticisms levelled at May’s Federal Budget, the Labor Government has announced changes to their Budget announcements.

Whilst the announced changes are important, they only address a couple of the many issues being raised with the Budget proposals. In particular, concessions will be made for beneficiaries of testamentary trusts and business owners making capital gains.

We have summarised these changes below, however, given the apparent lack of consultation surrounding the Budget measures, we suspect further changes will be made before the announcements make their way into law. One thing is certain though – the Budget keeps producing headlines!

• Death tax? What death tax?
• CGT concessions
  • Active Asset concession
  • Start-ups get some attention
  • Donations to charities

The 2026 Federal Budget measures have been a prominent topic of discussion in recent weeks. Many clients have been seeking clarity on how the proposed changes might impact their individual circumstances. While these measures are yet to be legislated, the level of uncertainty has prompted discussions, although our key message is – remain cautious and don’t act until legislation is passed unless you are considering a new transaction.

In this article, we outline the key changes to consider and what your next steps may be if any of the below measures apply to you:

1. Capital Gains Tax (CGT)
2. Negative gearing
3. Discretionary trust 30% tax

Additionally, our infographic covers the expected timeline for these key Federal Budget tax reforms.

In delivering the 2026 Federal Budget, the Albanese Government is seeking to introduce generational reforms to Australia’s income tax system. The announced changes appear consistent with their underlying wealth redistribution policies.

The well-telegraphed changes to Capital Gains Tax (CGT) and negative gearing have been formally announced. These changes are coupled with, in this writer’s opinion, far more significant changes to the laws relating to the taxation of discretionary trusts.

If legislated as announced on Budget night, this will require the vast majority of trusts in Australia to reconsider their utility beyond the announced effective date of 1 July 2028.

With the Federal opposition in a historical malaise, the Government has taken the opportunity to introduce changes to taxation laws of the like not seen since 1985 (cue Back to the Future music, Doc…).

As the changes do not take effect for a couple of years, and with the proposed ability to restructure available in the interim, it may be that the announced changes practically result in less revenue in the long run, but a 30% take collected along the journey. At least for a short period.

In good news(?) for NRL fans though, the PNG Chiefs Rugby League players have been provided an income tax exemption. So not everybody loses on Budget night.

Pilot’s summary of the key tax and business announcements follows.

Quicklinks

• Major Tax Reform
• Personal Taxation
• Business Taxation
• International Taxation
• Superannuation
• Other Measures

Read Pilot’s summary of the key tax and business announcements.

The upcoming Federal Budget has drawn the attention of many this year. Our predictions for next week’s Budget feel less speculative than prior years, and more like reading the writing on the wall, with Dr Jim Chalmers heavily telegraphing a major overhaul of long-standing principles of our tax system.

• The end of the CGT discount
• Negative gearing rears its head… again
• Trusts are only used by the “wealthy”, aren’t they?

Read the Taxation Advisory team’s budget predictions.