The Federal Budget has landed — and there’s quite a bit in it that affects how you run and structure your business. Here’s what you need to know, and what you should be thinking about right now.
$20,000 instant asset write-off is now permanent
The temporary $20,000 instant asset write-off will become permanent – that means it will apply to all future years, and you don’t need to rush with the acquisition, unless you want to catch the deduction this year.
Loss carry-back returns
Companies with global turnover under $1 billion can now carry a tax loss back and offset it against tax paid in the prior two income years — and receive a refund. This is a genuine cash flow lifeline for businesses that had a tough year. We have seen that before (during COVID) and assume the same rules will apply. More to come.
Discretionary trusts — major change coming in 2028
From 1 July 2028, a minimum 30% tax will apply to all distributions from discretionary trusts. Distributions to a company will effectively be double-taxed. A roll-over relief window runs from 1 July 2027 to 30 June 2030, giving you time to restructure — for example, into a company. We’ll be working closely with clients on new structures that protect assets while maintaining tax efficiency.
R&D Tax Incentive tightened from 2028
From 1 July 2028, the R&DTI program will focus on higher-value activities only. The turnover threshold for refundable offsets rises from $20M to $50M, and supporting R&D expenditure will no longer be eligible.
EVs in salary packaging
The full FBT exemption for electric vehicles under salary packaging ends 1 April 2029. A discounted rate will apply after that date. We’ll keep you posted as further details emerge.
What to do next?
If you derive income in a trust, you will have some time to rethink your structure, and implement changes. There will also be implications to your business exit strategy, due to CGT changes. We are sure this will be a hot topic in the coming months, and new resolutions will appear as we see the details emerging.
