What is the Innovative Business CGT Concession?
A plain-English overview of the proposed IBCC: who it's for, what the company must do, and how it fits into the wider CGT reform.
· 2 min read · For founders
The Innovative Business CGT Concession (IBCC) is a proposed concession for people who hold shares in eligible early-stage Australian companies. It's in the Treasury Laws Amendment (Tax Reform No. 4) Bill 2026, introduced on 27 October 2026. It is not yet law.
How it fits into the wider reform
The wider CGT reform is already law. From 1 July 2027, gains that accrue on most assets are indexed for inflation instead of getting the 50% discount. The IBCC would keep a 50% discount for qualifying start-up shares instead.
Who it's aimed at
- Founders who hold shares in the company they started
- Employees who hold equity, including through employee share schemes
- Early investors who subscribe for shares directly from the company
Companies, complying superannuation funds and foreign residents are excluded.
What the company needs to look like
In summary, the company must:
- be an Australian, unlisted company
- have aggregated turnover of $50 million or less, tested when the shares are issued
- carry on a qualifying innovative activity (lending, for example, is excluded)
- have at least two of its assets, workforce and income at 50% or more in qualifying activity for the prior completed year
- be registered as an IBCC company, and lodge annual reports
What the shareholder needs
- Shares issued directly by the company
- Shares held at risk for, generally, at least three years. This is waived on a cash takeover of all or substantially all shares.
- A sale for cash: shares sold for scrip lose IBCC status
There's no lifetime cap. Some employee share terms, such as fixed-price leaver buy-backs, may fail the at-risk test.
See the numbers
The CGT calculator compares the IBCC with indexation for founders, employees and angels, including how it stacks with the small business concessions. You can also try the eligibility checker.
Sources: Tax Reform No. 4 Bill and explanatory memorandum; Treasury exposure draft (September 2026), as summarised by Cooper Partners and RSM Australia.
General information only, not tax advice. Measures may change as legislation progresses.