Recent legislation affecting investment taxation, negative gearing and self-managed superannuation fund (SMSF) property rules has passed Parliament and is expected to commence from 1 July 2027, subject to Royal Assent.
While much of the public discussion has focused on property investors, the changes may also affect many business owners who hold investment assets as part of their broader wealth, retirement and succession planning.
What is changing?
The reforms include changes to capital gains tax concessions, negative gearing arrangements and the taxation of certain investment assets. The package also includes measures affecting self-managed superannuation funds and restrictions on borrowing arrangements used to acquire residential property.
Importantly, many of the measures distinguish between existing investments and future acquisitions, with transitional and grandfathering provisions expected to apply in certain circumstances.
For many taxpayers, the practical impact of the reforms will depend on the type of assets held, when those assets were acquired and how those investments and structures have been established.
Why does it matter?
For many business owners, investment assets and superannuation structures form an important part of long-term wealth creation, retirement planning and succession strategies.
Changes to the taxation of investment income and capital gains may influence future investment decisions, after-tax returns and the way in which assets are acquired and held.
Similarly, changes affecting SMSF investment arrangements may influence how some business owners approach retirement planning and the accumulation of wealth outside their business interests.
Because business and personal wealth strategies are often closely connected, these reforms may have implications beyond investment returns and may prompt a review of existing structures and long-term plans.
What businesses can expect?
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Increased interest in understanding how the new rules apply to existing investments and future acquisitions.
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Greater focus on investment structures and long-term wealth planning.
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Review of retirement, succession and asset protection strategies.
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Consideration of how SMSF investment arrangements may be affected by the new rules.
How Lewis Finlay can help?
The impact of these reforms will depend on your individual circumstances, the nature of your investments and your broader financial objectives.
For many business owners, investment and business decisions are closely connected. Changes affecting investment assets and superannuation structures may also influence retirement planning, succession planning and long-term wealth strategies.
We recommend reviewing existing investment and wealth structures before making significant decisions in response to the new rules.
If you would like to understand how these changes may affect your circumstances, please contact Lewis Finlay.