TITLE: Australian Business and Tax Update: CGT Threshold, Crypto Audits, ATO Tip-Offs and the Card Surcharge Ban
Prepare for the small business CGT threshold to rise to $10 million
The federal government has announced that the aggregated turnover threshold for the small business 50% active asset reduction will increase from $2 million to $10 million.
The change is expected to apply from 1 July 2027. It follows business criticism of proposed capital gains tax reforms and forms part of a wider package covering small businesses, startup investors and trusts.
The important point is that the $10 million threshold does not automatically apply to every small business CGT concession.
The government’s small business explainer confirms that:
- The 50% active asset reduction threshold will increase to $10 million.
- The 15-year exemption, retirement exemption and small business rollover continue to have their existing eligibility requirements.
- Businesses must still satisfy the active asset test and other conditions.
- Aggregated turnover includes the relevant connected entities and affiliates, not just the turnover of one company.
This could benefit private groups, digital businesses and growing ecommerce companies with turnover between $2 million and $10 million. However, the concession is not automatic. You will need accurate group-wide financial records and supporting evidence for the asset disposal.
The wider reforms are also expected to replace the general 50% CGT discount with an inflation-linked approach and a 30% minimum tax rate on real gains from 1 July 2027. That makes transaction records and year-end accounts especially important.
Review your structure before a future asset sale
If you may sell a business, website, software platform, brand or other active business asset, start organising the evidence now.
Maintain:
- Group turnover calculations.
- Ownership and connected-entity records.
- Asset acquisition and improvement costs.
- Evidence showing how the asset was used in the business.
- Board, shareholder or trustee records supporting the transaction.
Doing this early will make it easier to test eligibility when the new rules take effect.
Startup investors and testamentary trusts also feature in the reforms
The announcement also includes changes affecting investors in innovative Australian startups and certain testamentary or discretionary trusts.
The proposed startup investor concession is separate from the small business CGT threshold. Current reported changes include:
- Extending the maximum age of an eligible startup company from 10 to 15 years.
- Reducing the minimum shareholding period from five years to three years.
- Removing an earlier proposed $10 million cap on the amount of the investor concession.
These measures remain subject to detailed eligibility rules and implementation requirements. Founders and investors should retain complete share subscription, ownership and holding-period records.
Trust changes also require attention. The government’s Treasury material confirms that the four small business CGT concessions remain available where the relevant conditions are met. However, changes to the taxation of discretionary trusts may affect how capital gains are taxed and distributed.
Keep trust accounting, beneficiary records and company accounts up to date. This will reduce the risk of incorrect reporting when the rules change.
Expect tighter evidence requirements for SMSF crypto audits
The ATO is finalising new guidance for SMSF auditors on digital assets and cryptocurrency. The guidance is expected in the next few months, and a draft has already been circulated to an audit stakeholder group, according to SMS Magazine’s ATO coverage.
ATO SMSF Regulatory Branch director Kellie Grant said auditors must independently verify digital asset holdings. They should not rely solely on:
- Exchange holding statements.
- Client-prepared spreadsheets.
- Unverified screenshots.
- Unsupported wallet declarations.
Auditors are expected to use public blockchain data to verify wallet balances and sample transactions. They must also establish that the wallet is controlled by, and properly connected to, the SMSF.
Where sufficient evidence cannot be obtained, the auditor may need to modify the audit opinion and lodge an Auditor Contravention Report.
Build an audit-ready crypto evidence file
If your SMSF or business holds crypto assets, maintain a complete evidence trail covering:
- Wallet addresses and control evidence.
- Exchange statements and transaction exports.
- Blockchain transaction histories.
- Valuation evidence at the relevant reporting date.
- Records showing the asset is held separately from personal assets.
- The investment strategy and trust deed requirements.
- Purchases, disposals, swaps, staking income and other taxable events.
This matters beyond SMSFs. Australian ecommerce and digital businesses increasingly receive, hold or convert digital assets. Crypto transactions must be reconciled to accounting records and assessed for income tax, GST and capital gains treatment where relevant.
ATO tip-offs are increasing across Australia
The ATO received more than 52,000 community reports during 2025–26, equal to approximately 1,000 reports each week. Reports were around 11% higher than two years earlier, and approximately 83% were considered suitable for further review.
According to reporting by SmartCompany and the ATO’s shadow economy release, the most reported industries included:
- Building and construction.
- Cafés and restaurants.
- Hairdressing and beauty services.
The ATO says community information is an important intelligence source. This follows Operation Tonberry, during which ATO officers conducted more than 25 surprise visits to fast-food outlets, restaurants and cafés in Melbourne CBD on 22 and 23 September.
The activity focused on suspected under-reporting, cash-in-hand payments, unpaid superannuation and poor record keeping.
The message applies nationally. Businesses in Melbourne, Sydney, Perth, Western Australia and Queensland should ensure their sales, payroll and supplier records reconcile consistently.
Keep your records accurate every day. Strong bookkeeping makes it easier to respond to ATO questions and identify errors before they become compliance problems.
Remove card surcharges from 1 October
The card surcharge ban begins tomorrow, 1 October 2026.
The Reserve Bank of Australia’s official FAQ confirms that eftpos, Mastercard and Visa will introduce no-surcharge rules for credit, debit and prepaid card payments. American Express, UnionPay and PayPal have also announced changes, although PayPal’s rul
