Last night’s Federal Budget announcement by Treasurer Jim Chalmers introduced some of the most significant structural tax reforms we have seen in years. Amongst the changes, there are several key measures that will materially affect how West Australian businesses are structured, taxed and financed.
At Knight, our goal is always to translate technical complexity into accessible, relevant strategy. While many of these changes don’t kick in immediately, understanding them now will provide a clear roadmap for the years ahead.
What is changing for Businesses?
The Government has signalled a shift towards real-time compliance and long-term structural changes. Here is what you need to have on your radar:
- A new era for trusts: From 1 July 2028, a minimum tax of 30% will apply to the taxable income of discretionary trusts. This is a significant change to how many family businesses operate. To support those who need to pivot, the Government is providing a three-year “rollover relief” window from July 2027 to help businesses restructure into companies or other entities without immediate tax penalties.
- Cash flow wins: There is good news for equipment and tech upgrades. The $20,000 Instant Asset Write-off will become permanent from 1 July 2026 for businesses with turnover under $10 million. Additionally, the “Loss Carry-Back” measures return from July 2026, allowing companies to offset current losses against tax paid in the previous two years. Start-up Companies < $10m turnover can receive a refundable tax offset generated by losses in their first 2 years, from 1 July 2028. The offset will be limited to the value of FBT and withholding tax on wages paid for Australian employees that year.
- Monthly PAYG reporting: In a move toward more real-time business activity reporting, businesses can opt in to monthly PAYG instalments from 1 July 2027. This monthly system will be mandatory for taxpayers with a history of non-compliance.
- R&D and innovation: The Research & Development (R&D) Tax Incentive is undergoing a major overhaul from July 2028. The turnover threshold for the higher offset is increasing to $50 million, but the definition of “eligible expenditure” is tightening. If R&D is a pillar of your growth, we need to look at your eligibility timelines sooner rather than later.
The Knight Perspective
Our vision is financial prosperity for all, and that starts with proactive planning. These reforms are complex, particularly the changes to discretionary trusts and R&D definitions.
The most important thing to remember is that no immediate action is required. We are currently awaiting the full legislative detail. Once that is available, we will be sitting down with you to map out how these dates align with your long-term business goals.
Whether it is navigating the start up company loss refunds (starting July 2028) or preparing for the 2028 trust reforms, we are with you every step of the way.
Summary of Key Dates
| Measure | What Changes | Commencing From |
|---|---|---|
| Negative gearing – existing residential property | Existing properties held at announcement date are grandfathered | 12 May 2026 |
| $1,000 instant work‑related deduction | Workers can claim up to $1,000 deduction without receipts | 1 July 2026 |
| Payday super | Employer super guarantee must be paid on payday, not at the end of each quarter | 1 July 2026 |
| Division 296 | Additional tax of 15% on earnings on super balances over $3m (higher for balances over $10m) | 1 July 2026 |
| Company Loss Carry Back | Offset losses against tax paid in prior two years | 1 July 2026 |
| Personal tax rate cut (16% → 15%) | Applies to income $18,201–$45,000 | 1 July 2026 |
| Capital gains tax reform | 50% discount replaced with cost‑base indexation plus minimum CGT | 1 July 2027 |
| Capital gains tax on pre-1985 Assets | Gains accrued to 30 June 2027 remain exempt. Gains accruing after that date are now taxable | 1 July 2027 |
| Minimum CGT of 30% | Applies to post‑1 July 2027 gains of individuals, trusts & partnerships | 1 July 2027 |
| Negative gearing – loss quarantining | Losses on established properties, acquired after 12 May 2026 quarantined to property income/CGT | 1 July 2027 |
| Second personal tax rate cut (15% → 14%) | Further reduction for income $18,201–$45,000 | 1 July 2027 |
| Working Australians Tax Offset (WATO) | $250 permanent annual tax offset for income from work | 1 July 2027 |
| Restructure Rollover Relief – 3 Year Period | Expanded tax relief measures available to business restructuring out of Trusts | 1 July 2027 |
| Discretionary trust minimum tax | Trustees pay 30% minimum tax; non‑refundable credits to beneficiaries (other than companies) | 1 July 2028 |
| Loss Refunds for Small Start Up Companies | For companies with turnover <$10m, losses within first 2 years can be refunded, capped at employee related taxes | 1 July 2028 |
Get the full technical breakdown
For the comprehensive list of changes, including specific details on Venture Capital incentives and ATO fraud strategy, you can read the full technical summary from our national partners at Bentleys here: