Albanese, Chalmers unveil CGT carve-outs for small businesses, startups

• The federal government is considering changes to capital gains tax concessions aimed at startups and small businesses to encourage investment and economic growth.
• Proposed adjustments could expand eligibility or improve incentives, making it easier for investors and founders to benefit from tax relief when selling assets.
• While supporters say reforms could boost innovation and entrepreneurship, critics warn they may reduce tax revenue and disproportionately benefit wealthier investors.

Founders, employees and early investors in startup companies will get an extra capital gains tax discount as the federal government moves to stamp out the backlash to its budget.

Labor has been consulting with the startup sector and with small businesses, which have argued that the proposed overhaul to the capital gains tax would unfairly penalise them and stifle innovation.

More small businesses will stand to receive the 50 per cent active asset discount, which currently applies to those with an annual turnover of up to $2 million.

That will be expanded up to $10 million under the proposal.

That discount applies in addition to the regular 50 per cent capital gains tax discount when businesses or business assets are sold. 

Labor wants to replace the regular 50 per cent discount with an inflation-linked discount.

The details of the carve-out for startups will be subject to consultation, but the initial suggestion is a choice between a 50 per cent discount and an inflation discount, applying to “new, innovative” businesses. 

Founders, early stage investors and employees granted shares as part of their remuneration will be included.

“The next steps …

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Original article and photo by "ABC News"