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The CGT reform is law and starts on 1 July 2027. The IBCC is still a bill. Content last reviewed 13 November 2026. See status

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CGT Calculator · worked examples

What the CGT reform does to private company shareholders.

Twenty-four scenarios for founders, families, employees and investors. Change any input, add a cost base where it appears, or change a concession's eligibility, and each route recalculates.

Enacted lawProposed lawConditional readingIncompleteHypothetical

Figures are illustrative only and not tax advice. Read the assumptions and caveats below the calculator.

Example 1Proposed lawUnsettled points

Bootstrapped founder: IBCC plus active asset reduction

A bootstrapped software company, incorporated 2028 and registered for the IBCC, with $6m turnover and a value of about $12m. A 25% founder sells for cash in 2033. The company fails the $2m turnover and $6m net asset tests, so the retirement exemption is not available. The active asset reduction depends on the $10m threshold reaching the company whose shares are sold.

Inputs

Tax on each route

Indexation routeConditional reading
$705,000
IBCC routeConditional reading
$352,500

Difference between the first two routes: $352,500

Indexation route

Gain$3,000,000
After indexation$3,000,000
After 50% active asset reduction$1,500,000
Effective rate23.5%
Tax$705,000

IBCC route

After 50% IBCC discount$1,500,000
After 50% active asset reduction$750,000
Effective rate11.8%
Tax$352,500

What decides it

Whether the $10m threshold reaches the company in a share sale (the object-company test); the founder staying at 20% or more; IBCC registration. The retirement exemption needs the company under $2m turnover or within the $6m net asset test.

Read before relying on a figure

Assumptions and caveats

Status of the law (as at 13 November 2026)

  • The core reform is enacted: the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 replaces the 50% discount with indexation for gains accruing from 1 July 2027, adds the 30% minimum tax and deems assets held at 30 June 2027 sold and reacquired.
  • The Innovative Business CGT Concession (IBCC) is proposed in the Tax Reform No. 4 Bill (introduced 27 October 2026) and is not law. The discretionary trust minimum tax and the AMIT, part-year resident and estate rules are proposed in Tax Reform No. 3 (trust tax from 1 July 2028).
  • The apportioning formula is an unregistered draft determination. It covers real property and assets without a readily ascertainable market value; listed shares, and assets whose cost base is already set by market value under another provision, are excluded.
  • Only new residential dwellings keep the 50% discount under the enacted Act (supplementary explanatory memorandum, para 1.8).

Small business concessions

  • The $10m turnover threshold applies only to the 50% active asset reduction. The 15-year exemption, retirement exemption and rollover keep the $2m turnover test or the $6m net asset test (supplementary EM, para 1.21).
  • On a share sale the company itself must also be small: a CGT small business entity or within the $6m net asset test, counting connected entities at a 20% threshold (s 152-10(2)). The EM does not say whether the $10m deeming reaches that object-company test. Examples 1 and 4 assume it does and are marked as conditional readings.
  • A significant individual holds a 20% participation percentage, measured as the lowest of voting, dividend and capital rights, directly and indirectly. A spouse who is a significant individual can also make someone a CGT concession stakeholder. The examples use simple cap-table percentages.
  • The retirement exemption is a $500,000 lifetime cap per person, assumed unused unless you change it above; under 55, the exempt amount must go into super.
  • Stacking the IBCC with the active asset reduction relies on the Tax Reform No. 4 explanatory memorandum, which leaves Division 152 unchanged; the bill text should be confirmed.

Method and simplifications

  • Indexation uses a flat CPI rate compounded annually, including part years. The statutory method uses actual CPI figures and dates.
  • Individuals are taxed at the top marginal rate including the Medicare levy, except in example 20. Companies pay 30% and franking credits are assumed fully usable. Time value, stamp duty, fees and other costs are ignored.
  • Founder and employee shares have a nil cost base unless you tick "Add a cost base". The cost base is treated as the first element only; reduced cost base adjustments, further subscriptions and capital returns are not modelled.
  • Losses: a loss up to 30 June 2027 or after 1 July 2027 offsets the other part of the same asset's gain, and any excess is shown as a capital loss carried forward. Indexation never creates or increases a loss.
  • "Not assessed" appears where a concession's eligibility is set to unknown. A result marked "Hypothetical" shows an outcome the law does not allow, for comparison.
  • Example 24 rests on two readings that no source confirms: that an ESIC-exempt gain stays outside the minimum tax, and that the IBCC applies to growth after the ESIC 10-year reset.

Sources

General information only, not tax advice. Measures may change as legislation progresses.

Before 1 July 2027

See what the changes mean for your shares.

Work through 24 real-world scenarios and compare the tax on each route, before and after the reform.

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