New CGT threshold may reshape growth plans for Australian SMEs
What the proposed tax shift means for succession, reinvestment and borrowing confidence
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The Federal Government’s latest small business tax adjustment could give thousands of growing Australian SMEs more breathing room when planning expansion, succession or an eventual sale.
The key change is an increase to the turnover threshold for the small business 50 per cent active asset capital gains tax concession, moving it from $2 million to $10 million.
In practical terms, more businesses may be able to reduce the taxable gain on eligible active business assets held for more than 12 months.
For business owners, the significance is not just tax-related. A clearer pathway to retaining more value from a sale or restructure can influence how owners think about reinvestment, debt, succession and long-term capital planning. Many SMEs with turnover between $2 million and $10 million sit in a challenging middle ground: too large for some traditional small business concessions, but still operating with the cash flow pressures, staffing constraints and funding hurdles that smaller firms face.
The funding angle matters. When owners can make more confident assumptions about future tax outcomes, they may be better placed to decide whether to borrow for equipment, premises, acquisitions or working capital. Lenders also tend to look closely at business continuity, asset quality, profitability and future plans. A more supportive tax setting may strengthen the case for owners who are preparing for growth, provided their financial records, cash flow forecasts and repayment capacity are sound.
That said, SMEs should treat this as a planning prompt rather than a green light to make rushed decisions. The change relates to one specific CGT concession, not every small business CGT relief measure. Eligibility will still depend on the final rules, the nature of the asset, ownership structure, turnover, timing and other tax conditions. Business owners considering a sale, restructure or major finance application should speak with their accountant, tax adviser and finance broker before relying on the concession in forecasts.
Our takeaway for business-loans.au readers is simple: tax settings and finance strategy should not be considered separately. If your business is approaching the $2 million to $10 million turnover range, now is the time to review your structure, update valuations, clean up financial statements and model your funding needs. Whether you are preparing to expand, refinance or transition ownership, stronger planning can improve both tax outcomes and business loan readiness. For tailored support, consider seeking a free business loan assessment before committing to your next funding move.
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That $2m to $10m turnover middle ground is exactly where a lot of businesses seem to get stuck, too big for simple concessions but not exactly flush with cash either. I’d be interested to know how lenders might treat a planned restructure when assessing a business loan, especially if the tax outcome isn’t final yet.
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Knowledgebase
Option: A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.
That $2m to $10m turnover middle ground is exactly where a lot of businesses seem to get stuck, too big for simple concessions but not exactly flush with cash either. I’d be interested to know how lenders might treat a planned restructure when assessing a business loan, especially if the tax outcome isn’t final yet.