The family home goes to their spouse. Savings are divided between children. Investments remain within the family. Superannuation helps support loved ones after they’re gone. The assumption is often that because those intentions seem straightforward, the outcome will be too.

However, when it comes to estate planning, what people expect to happen and what actually happens are not always the same thing. Ownership structures, superannuation arrangements, beneficiary nominations and outdated documentation can all influence how assets are distributed and who ultimately receives them.

Understanding these areas may help provide greater confidence that your wishes align with the structures surrounding your wealth.

1.Having a Will Doesn’t Always Mean Everything Is Covered

When people think about estate planning, a will is usually the first thing that comes to mind.

Having a valid and up-to-date will is an important part of the process. It provides direction regarding how certain assets should be distributed and who will be responsible for administering your estate. What is often overlooked, however, is that a Will may not automatically control every asset you own.

Over time, people acquire new assets, establish different ownership arrangements or experience significant life events that can affect how their estate is structured. A will that reflected your circumstances ten years ago may not necessarily reflect them today. This doesn’t mean your will is ineffective. It simply highlights the importance of reviewing your broader estate planning arrangements periodically to ensure they continue to align with your intentions.

2. Your Superannuation May Sit Outside Your Will

For many Australians, superannuation represents one of their largest assets.

Despite this, it is often misunderstood when it comes to estate planning. A common assumption is that superannuation automatically forms part of an estate and will be distributed according to the instructions outlined in a will. In reality, superannuation may be treated differently depending on factors such as beneficiary nominations and the rules governing the fund. As balances continue to grow throughout a person’s working life, ensuring superannuation arrangements remain current can become an important part of broader wealth planning.

Reviewing beneficiary nominations from time to time may help ensure they continue to reflect your wishes and current circumstances.

3. The Way Assets Are Owned Matters

Not all assets are owned in the same way.

Some may be held individually. Others may be jointly owned. Certain assets may sit within a family trust or company structure. These ownership arrangements can influence how assets are dealt with in the future and whether they form part of an estate in the way people expect.

For example, two people may hold similar assets but have very different outcomes depending on how those assets are structured and owned. This is one reason estate planning often extends beyond simply preparing a will. Understanding how assets are held can provide a more complete picture of how wealth may ultimately transfer between generations.

4. Life Changes Can Impact Your Plans

Few financial plans remain untouched throughout life. Relationships change. Families grow. Children become financially independent. Assets are acquired and sold. Retirement approaches.

Yet estate planning documents and beneficiary arrangements are often left unchanged for years. A plan that accurately reflected your wishes at one stage of life may no longer align with your current circumstances. This doesn’t necessarily mean major changes are required. However, regular reviews may help identify whether existing arrangements continue to support your objectives and reflect the people most important to you.

5. Blended Families Can Create Additional Complexity

Modern family structures are often more complex than they were in previous generations.

Second marriages, de facto relationships, stepchildren and extended family arrangements can all introduce additional considerations when planning how assets should be distributed. In many cases, people have clear intentions regarding how they would like their wealth divided. The challenge is ensuring those intentions are supported by appropriate structures and documentation. Without careful planning, misunderstandings and disputes can sometimes arise during an already emotional period for family members. While every family situation is unique, reviewing estate planning arrangements through the lens of current family dynamics may help reduce uncertainty in the future.

6. Estate Planning Is About More Than Distributing Assets

Estate planning is often viewed as a process focused purely on money and assets.

In reality, it is also about providing clarity. Clear arrangements can help reduce uncertainty for loved ones, support smoother administration and provide greater confidence that your wishes are understood. For many people, the goal is not simply deciding who receives what. It is creating a framework that supports family members, protects wealth and provides direction during a difficult time. Taking the time to understand how your assets are structured and how they may be transferred can play an important role in achieving that outcome.

Final Thoughts

Most people have a vision for how they would like their assets to be distributed.

The challenge is that intentions alone do not always determine outcomes. Superannuation arrangements, ownership structures, beneficiary nominations and changing personal circumstances can all influence where assets ultimately end up and how smoothly they are transferred. Regularly reviewing your estate planning arrangements may help ensure they continue to reflect your wishes and support the people you care about most.

How Carbon Wealth Management Can Help

Estate planning is not just about preparing documents. It is about understanding how your wealth is structured and whether your arrangements continue to align with your goals, family circumstances and long-term intentions.

At Carbon Wealth Management, we work with individuals and families to help them better understand the broader picture surrounding their wealth. This may include reviewing superannuation, beneficiary nominations, ownership structures and how these elements fit within an overall estate planning strategy.

If you’re unsure whether your current arrangements reflect your wishes, a review may help provide greater clarity and confidence about the future.

As part of the Federal Government’s recent tax reforms, new Limited Recourse Borrowing Arrangements (LRBAs) for residential property through SMSFs will no longer be permitted. The change forms part of a broader package of housing and tax reforms and is aimed at limiting the use of superannuation borrowing for residential property investment. Existing borrowing arrangements will be grandfathered, meaning they can continue under the current rules, while borrowing to acquire eligible commercial property through an SMSF remains available. 

While the announcement has generated plenty of discussion, what should current and prospective SMSF investors take note of? 

What has changed? 

Previously, SMSFs could borrow to purchase residential investment property using a Limited Recourse Borrowing Arrangement (LRBA). This structure allowed SMSF to borrow funds while limiting the lender’s security to the asset being purchased. 

Under the new rules: 

• SMSFs will no longer be able to establish new LRBAs to purchase residential property. 

• Existing residential LRBAs are expected to continue under grandfathering provisions. 

• Borrowing to acquire eligible commercial property through an SMSF is not affected by these changes. 

It’s important to note that this change relates to borrowing, not SMSF property ownership itself. An SMSF can still invest in residential property if it has sufficient funds to purchase the assets outright and all existing superannuation rules are met. 

Why has the Government introduced this change? 

The Government has described the reform as a way to strengthen Australia’s superannuation system while supporting broader housing affordability objectives. 

Although SMSF borrowing represents only a small proportion of Australia’s residential property market, concerns have existed for several years that allowing leverage within superannuation increased investment risk and created an unintended advantage for some investors. 

Who is affected? 

Investors planning to buy residential property through an SMSF 

If your strategy relied on borrowing through your SMSF, you’ll need to reassess your options once the new rules commence. 

This doesn’t necessarily mean your investment plans need to stop, but it may mean considering alternative ownership structures or funding strategies. 

Existing SMSF property owners 

If your SMSF already has a residential property purchased under an LRBA, the current arrangements are expected to remain in place. 

In most cases, you won’t be required to sell the property or unwind your existing loan simply because of the legislative change. 

Business owners 

Importantly, these changes do not prevent SMSFs from borrowing to purchase eligible commercial property.

For many business owners, purchasing their business premises through an SMSF can still form part of an effective long-term retirement and asset protection strategy, depending on their individual circumstances. 

Should you still consider an SMSF? 

An SMSF can still be a valuable wealth creation and retirement planning vehicle. 

However, property should never be the sole reason for establishing an SMSF. 

Before deciding whether an SMSF remains the right structure for you, it’s important to consider : 

• your retirement objectives 

• your investment timeframe 

• diversification across different asset classes 

• cash flow requirements 

• ongoing compliance obligations 

• administration and audit costs 

• your ability to fund investments without relying on residential borrowing. 

Every investor’s circumstances are different, and the most appropriate strategy will depend on your broader financial goals rather than one investment opportunity. 

What should you do next? 

If you were planning to purchase residential property through your SMSF, now is the time to review your strategy. 

While the recent changes may affect how you invest, they don’t necessarily change why you’re investing. There may still be alternative structures available that better suit your circumstances, whether that’s investing outside of super, reviewing your financing options or exploring different asset classes. 

Seeking professional advice before making any changes can help ensure your investment strategy remains tax-effective, compliant and aligned with your long-term objectives. 

How Carbon can help 

Changes to tax and superannuation legislation can have significant implications for your financial plans. 

Our Carbon Wealth team can work with you to understand your circumstances, explain how legislative changes may affect them and develop strategies that help support both your immediate needs and long-term goals. 

Before deciding whether an SMSF remains the right structure for you, it may be worth consulting with a financial advisor who will consider reviewing your existing investment strategy or exploring alternative ownership structures.

Yet for many individuals and business owners, financial progress does not always feel as clear in practice as it does in theory. As financial positions become more complex, decisions around investing, cash flow, debt and long-term planning can become increasingly interconnected. In many cases, the challenge is not simply access to opportunities but understanding how financial decisions align with broader objectives and long-term direction.

Building wealth rarely comes down to one decision alone. More often, it is shaped by how financial decisions work together as you go.

So what tends to influence long-term financial progress, and where do people commonly feel uncertain along the way?

1. Understanding why financial progress may feel unclear despite rising income

Increasing income does not always create the sense of financial progress people expect. For business owners and professionals, higher earnings may also come with increased financial commitments, greater operating costs or ongoing reinvestment back into the business. As priorities shift, it can become difficult to determine whether wealth is genuinely building or whether income is simply moving in more directions.

This may create a situation where financial performance appears strong on paper, while long-term progress or financial security still feels uncertain.

2. Balancing immediate financial commitments with long-term wealth objectives

Building wealth often involves balancing present-day responsibilities with future financial goals. Mortgage repayments, business expenses, family commitments and lifestyle costs can all compete alongside investing and long-term planning priorities. This can make it difficult to determine how much should be allocated towards future wealth creation versus current obligations.

Without clarity around objectives, timeframes and priorities, financial decisions may begin to feel reactive rather than intentional.

3. Managing concentration risk when wealth is tied to the business

For many business owners, a significant portion of personal wealth may already be connected to the business itself. While this may create substantial long-term value, it can also increase exposure to a single source of income or asset class. As businesses grow and financial positions evolve, questions around diversification and broader wealth creation often become more relevant.

Building wealth outside the business may help create greater financial balance and flexibility over time, although the appropriate approach can vary depending on individual circumstances and objectives.

4. The importance of aligning financial decisions with a broader strategy

Financial decisions are often made individually rather than as part of a broader strategy. An investment opportunity may arise, surplus cash may begin to build or a property purchase may be considered. However, when these decisions are viewed in isolation, they may not always support broader financial goals in the way intended.

What often matters most is not simply the decision itself but how it aligns with cash flow, tax position, debt levels, structure and long-term direction.

5. Navigating the influence of external financial and investment commentary

Financial and investment commentary has become increasingly accessible through social media, podcasts and online platforms. While some insights may be valuable, much of the information available is general in nature and may not consider individual financial positions, objectives or risk tolerance. This can create pressure to act quickly or compare progress against others without understanding the broader context behind those decisions.

Over time, this volume of external commentary may contribute to uncertainty rather than clarity.

6. The role of cash flow, debt and structure in long-term wealth creation

Long-term wealth creation is rarely influenced by investment decisions alone.

Cash flow management, debt structure and the way assets are held may all influence financial flexibility and long-term outcomes. In some situations, growth opportunities receive the majority of attention while the underlying financial structure receives less review.

Without visibility over how these areas interact in the long run, it may become more difficult to make informed financial decisions with confidence.

7. Taking a more connected approach to building and managing wealth

Building wealth often becomes clearer when financial decisions are viewed collectively rather than independently.

This may involve:

• understanding how investments align with long-term objectives
• reviewing cash flow and debt alongside growth strategies
• considering diversification and risk exposure
• ensuring structures remain aligned with current circumstances and future plans

Over time, a more connected approach may support greater clarity around financial progress and long-term direction.

Looking Beyond the Next Financial Decision

Building wealth is rarely shaped by one investment, one opportunity or one financial year. More often, long-term financial progress is influenced by consistent decisions made as financial positions evolve and a clearer understanding of how those decisions support broader goals. In many cases, the challenge is not a lack of opportunity but creating enough clarity to determine which decisions align with the direction someone is ultimately working towards.

How Carbon Wealth Management Supports Clients

At Carbon, our Wealth Management team works with individuals and business owners to help connect the different parts of their financial position.

This may include:

• reviewing long-term financial goals
• understanding investment and diversification considerations
• considering cash flow, debt and structure together
• creating strategies aligned with broader financial objectives

Our focus is on helping clients move forward with greater clarity and confidence as their financial position continues to evolve.

What’s New for EOFY 2026

Before diving into the checklist, here are the key changes specific to this financial year that every business owner needs to be across.

Payday Super starts 1 July 2026:  From 1 July, employers must pay superannuation contributions at the same time as wages not quarterly. Contributions must reach the employee’s super fund within 7 business days of each payday. The quarterly payment model ends with the Q4 2025–26 payment due 28 July 2026. This is the last quarterly super payment you will make.

SBSCH closes 1 July 2026: The ATO’s Small Business Superannuation Clearing House used by many small businesses to batch and submit super payments  is being decommissioned. If you currently use the SBSCH, you must transition to a Super Stream-compliant alternative clearing house before 1 July. Speak to your payroll software provider or super fund about your options now.

Instant asset write-off last chance at $20,000: The $20,000 instant asset write-off for businesses with turnover under $10 million from 1 July becomes permanent so the $20,000 threshold is secured going forward. However, any asset you want to claim this financial year must be purchased, installed, and ready for use before 30 June.

New PAYG withholding tax tables from 1 July 2026: The 16% marginal tax rate for income between $18,201 and $45,000 drops to 15% from 1 July 2026. Updated PAYG withholding tax tables will apply from your first pay run in the new financial year. Your payroll software should update automatically but verify before processing your first July payroll.

STP reporting changes From 1 July 2026, employers must report both Ordinary Time Earnings (OTE) and total super liability in Single Touch Payroll (STP) to support the ATO’s real-time Payday Super monitoring. Check with your payroll software provider that this reporting is set up correctly.

Part 1: Bookkeeping Checklist

Bookkeeping is the foundation everything else sits on. Your accountant cannot prepare an accurate tax return from incomplete or unreconciled records, and problems found in August cost more to fix than problems found in May. Work through this list before 30 June.

Reconcile everything

• Bank accounts: Reconcile all business bank accounts and credit cards to 30 June. Every transaction should have a coded record in your accounting software. Unreconciled items are the most common source of errors in EOFY reports.
• GST coding: Review your GST coding across the year. Incorrectly coded transactions affect both your BAS and your tax return. Pay particular attention to mixed-use expenses, international purchases, and any large one-off transactions.
• Accounts receivable: Review outstanding invoices. If any debts are genuinely unrecoverable, writing them off before 30 June allows you to claim a bad debt deduction in the current year. You cannot claim the deduction after the year ends.
• Accounts payable: Ensure all supplier invoices received before 30 June are entered, even if payment is due in July. Accrual-basis businesses need to capture expenses in the period they were incurred.
• Petty cash and loan accounts: Reconcile any director or shareholder loan accounts, petty cash floats, and intercompany accounts. Director loan accounts need particular attention for Division 7A compliance.

Asset register

• Review your fixed asset register and confirm depreciation has been calculated correctly for the year.
• Remove any assets that have been disposed of, written off, or scrapped during the year.
• For assets purchased this year, confirm they meet the instant asset write-off eligibility criteria (cost under $20,000, purchased and in use before 30 June, business turnover under $10 million).

Inventory

• If your business holds stock, conduct a physical stock take as close to 30 June as possible.
• Identify any obsolete, damaged, or unsellable stock and write it down to net realisable value before year end to bring forward the deduction.

Finalise your software

• Ensure Xero, MYOB, or your accounting platform is up to date and all transactions are coded to 30 June.
• Lock prior periods to prevent accidental changes to reconciled data.

Export and save year-end reports: profit and loss, balance sheet, aged receivables, aged payables, and general ledger.

Part 2: Tax Checklist

Once your books are clean and reconciled, your accountant can work efficiently to prepare your tax return and identify any year-end planning opportunities. The items below are worth reviewing before 30 June, not after.

Tax planning before 30 June

• Prepay deductible expenses: If your business is on a cash basis, prepaying expenses like insurance, subscriptions, rent, or professional memberships before 30 June can bring forward deductions into the current year. Most prepayments for a period of 12 months or less are immediately deductible.
• Review your income timing: If you can legitimately defer invoicing to July without affecting your commercial relationships, doing so pushes income into next year’s return. Accrual-basis businesses have less flexibility here, but it is worth discussing with your accountant.
• Trust distributions: If your business operates through a discretionary trust, the trustee resolution to distribute income must be made and documented before midnight on 30 June. Missing this deadline has significant tax consequences. Do not leave it until the last day.
• Superannuation contributions: If you are a business owner who wants to make additional concessional super contributions for yourself before the cap ($30,000 for 2025–26), the payment must be received by the fund before 30 June. Allow at least a week for processing.
• Division 7A: Ensure any loans from a company to shareholders or associates are either repaid or formalised under a complying loan agreement before lodgment. Your accountant can advise on the minimum annual repayment required.

Instant asset write-off final check

• Assets must be costing less than $20,000 each, purchased, first used, or installed ready for use before 30 June 2026.
• Your business must have aggregated turnover under $10 million.
• The write-off applies on a per-asset basis there is no cap on the number of assets you can claim.
• From 1 July 2026, the $20,000 threshold is permanent but assets purchased in the new year will be claimed in next year’s return, not this one.

Business structure review

This time of year is also a good moment to take stock of whether your current structure still makes sense. The 2026–27 Federal Budget introduced a 30% minimum tax on discretionary trusts from 1 July 2028, and three-year rollover relief from 1 July 2027 for businesses that want to restructure without triggering CGT. If you operate through family trust and haven’t yet mapped out your options, now is the time to start that conversation.

BAS and GST

• Your June quarter BAS (or June monthly BAS) will be due in late July. Make sure your GST-coded transactions are accurate before lodgment.
• If your business has been making PAYG instalment variations during the year, ensure those variations are reconciled against actual income.

Record keeping

• The ATO requires business records to be kept for a minimum of five years. Ensure your digital records, receipts, and contracts from the 2025–26 year are stored securely.
• Cloud accounting software like Xero retains your data automatically but physical receipts for significant purchases should be scanned and saved.

Part 3: Payroll Checklist

Payroll has its own set of EOFY obligations, and this year the stakes are higher than usual given the Payday Super transition on 1 July.

Before 30 June

• Pay superannuation early: For super contributions to count toward this financial year, the payment must be received by the super fund before 30 June not just sent. Allow at least two weeks for clearing times, particularly if using a commercial clearing house. The Q4 super deadline under the old quarterly system is technically 28 July, but paying early means contributions are deductible in the current year.
• Process bonuses and commissions: Any bonus or commission you want included in this year’s payroll records and income statements must be processed through your payroll system before 30 June. Last-minute bonus runs on 29 June create errors.
• Review payroll accuracy for the full year: Check that every pay run from 1 July 2025 to 30 June 2026 has been processed correctly. Look for missed pays, incorrect leave accruals, and any manual adjustments that weren’t properly reconciled.
• Confirm the SG rate is set to 12%: The superannuation guarantee rate has been 12% since 1 July 2025. Check your payroll software is calculating super correctly on ordinary time earnings for every employee.
• Review leave balances: Check that annual leave, personal leave, and long service leave balances in your payroll system match your records and employee expectations. Discrepancies are easier to resolve before year end.

Single Touch Payroll (STP) finalisation

• Ensure your payroll is fully reconciled at the EOFY against the STP records with the ATO.  Any discrepancies will be picked up and may incur an ATO payroll audit.  Speak to your payroll provider if needed or ask our team for assistance.
• Submit your STP finalisation event for all employees by 14 July 2026. This confirms your employees’ year-to-date income, tax withheld, and super figures and allows them to pre-fill their individual tax returns.
• If an employee has left during the year, ensure their records are finalised correctly.
• From 1 July 2026, STP must also report Ordinary Time Earnings and total super liability. Confirm your payroll software is updated before the first July pay run.

Transition away from the SBSCH

• If your business currently uses the ATO’s Small Business Superannuation Clearing House, you must transition to an alternative before 1 July 2026 with enough time to set up the new systems before your first payroll of the 2027 financial year.
• Contact your payroll provider to assist you to integrate to your software provider (Xero, MYOB, KeyPay) most have integrated clearing house solutions that are SuperStream compliant.
• Do not leave this until July. Transitions take time to set up and test.

Update for Payday Super from 1 July 2026

• From 1 July, every pay run must include a super contribution that reaches the employee’s fund within 7 business days of the pay date.
• Review your cash flow the shift from quarterly lump-sum payments to per-payroll super will change your outgoing cash rhythm significantly.
• Update your payroll software settings and clearing house configuration before processing your first July pay run.

Annual Wage Review

• The Fair Work Commission announces the outcome of the Annual Wage Review each year in early June, with new minimum wage rates taking effect from the first full pay period on or after 1 July.
• The 2026–27 decision is expected in early June 2026. Once announced, update your payroll so it is ready for that first full July period before the first July pay run. Employees paid under modern awards must receive the updated rate from the effective date.

Review relevant award rates for each employee’s classification if you have award-covered staff.

Key Dates at a Glance:

How Carbon Can Help

EOFY is one of the busiest periods for our teams across Australia, and the earlier you start, the smoother it goes. Whether you need help with bookkeeping reconciliation, tax planning before 30 June, payroll finalisation, or getting ready for Payday Super our accountants, bookkeepers, and payroll specialists are here to work through it with you.

Disclaimer: This checklist is general in nature and does not constitute personal tax or financial advice. Tax laws change frequently and individual circumstances vary. Please speak with your Carbon accountant or bookkeeper for advice specific to your business.

Main Highlights:

• A new $250 Working Australians Tax Offset (WATO) for over 13 million workers for the 27-28 financial year. 
• A $1,000 instant tax deduction for work-related expenses from the 27-28 financial year, no receipts required. 
• The 16% marginal tax rate drops to 15% on 1 July 2026, then 14% on 1 July 2027. 
• Fuel excise more than halved (52.6c to 20.6c per litre) and heavy vehicle road user charge cut to zero for three months from 1 April 2026. 
• $20,000 instant asset write-off made permanent from 1 July 2026 for small businesses (turnover under $10 million). 
• Loss carry back permanently reintroduced for companies with turnover up to $1 billion. 
• Loss refundability introduced for new start-ups (from 2028–29). 
• Negative gearing limited to new builds, and the 50% CGT discount replaced with cost base indexation plus a 30% minimum tax on capital gains, both from 1 July 2027. 
• A 30% minimum tax on discretionary trusts from 1 July 2028. 
• $10.2 billion per year reduction in regulatory burden, including the abolition of 497 nuisance tariffs. 

2026–27 Federal Budget: For Individuals

This section covers the measures aimed at individuals and families, income tax, fuel relief, healthcare and household support. 

Income Tax Cuts (Five Rounds, Combined Benefit Up To $2,816) 

The Government is cutting taxes five times when combined with previously legislated changes. The new and confirmed measures include: 

• Working Australians Tax Offset (WATO): A new, permanent $250 tax offset from the 2027–28 income year, available to over 13 million workers, including around 1.5 million sole traders. 97% of eligible workers are expected to receive the full $250. 
• $1,000 Instant Tax Deduction: From 2027–28 financial year, employees can claim a flat $1,000 deduction for workrelated expenses without keeping receipts. Around 6.2 million workers (42% of taxpayers) will benefit, with
  an average tax saving of $205. You can still itemise instead if your actual expenses are higher.
• Marginal rate cuts: The 16% rate on income between $18,201 and $45,000 drops to 15% from 1 July 2026, then to 14% from 1 July 2027, worth up to $268 in 2026–27 and $536 every year from the 2027–28 financial year.

Currently legislated marginal tax rates (the bracket and rate path from the 2025–26 Budget — unchanged in this Budget):

What’s NEW in this Budget, combined annual tax benefit by income level (FY28 vs FY24):

Figures are derived from the Budget Overview worked examples (Dean the mechanic at $70,000 and the average worker at $81,245). The instant tax deduction benefit depends on your marginal rate; itemising actual deductions may produce a better result if your work-related expenses exceed $1,000.

Combined with the WATO and the $1,000 instant tax deduction, an Australian worker on average earnings ($81,245) could be up to $2,816 better off in 2027–28 compared to 2023–24 settings. 

Fuel Excise Relief

To soften the impact of the global oil shock: 

• Fuel excise on petrol and diesel has been more than halved from 52.6 to 20.6 cents per litre  for three months from 1 April 2026. 
• The heavy vehicle road user charge has been cut to zero for the same three-month period. 
• A typical driver filling a 40-litre tank weekly is expected to save around $14 per tank and roughly $170 over the three months. 
• The ACCC has been directed to publish weekly retail fuel price reports, and maximum penalties for major breaches of competition and consumer law have been doubled to $100 million. 

Cost-of-Living and Family Support

• Government-funded Paid Parental Leave increases to a full six months from July 2026. 
• The 3 Day Guarantee for the Child Care Subsidy makes 87,500+ additional families eligible for at least 72 hours of subsidised care. 
• $182.6 million to make the Child Support Scheme safer and more effective, including measures targeting financial abuse and non-compliance. 
• $59.4 million to help Community Housing Providers support over 4,000 young people aged 16–24 at risk of or experiencing homelessness. 
• The Government has backed wage growth at every recent Annual Wage Review — the National Minimum Wage has increased by over $9,120 per year across the last four reviews. 

2026–27 Federal Budget: Housing & Rental Support

Housing affordability remains a major focus, and this Budget introduces some of the most significant tax changes to investment housing in decades. 

Negative Gearing — Limited to New Builds from 1 July 2027

• From 1 July 2027, negative gearing for residential property investments will be limited to new builds. 
• Transitional rules for established residential properties: Properties purchased between the announcement (12 May 2026) and 30th June 2027 may be negatively geared but not from 1 July 2027. 
• Properties held at announcement date (12 May 2026) will be exempt from the changes until disposed of. 
• Properties purchased from 1 July 2027 will not be able to be negatively geared for established properties. 
• Properties purchased after 1 July 2027 will be treated wholly under the new arrangements except for new properties.  
• Important to note: Commercial property, shares and other asset classes are unaffected and can continue to be negatively geared. 

Capital Gains Tax — Cost Base Indexation + 30% Minimum

From 1 July 2027, the 50% CGT discount will be replaced for individuals, trusts and partnerships with: 

• Cost base indexation (similar to the pre-1999 regime, using CPI) meaning tax is only paid on the real gain above inflation. 
• A 30% minimum tax rate on real capital gains. 
• Buyers of new builds can choose between the old 50% CGT discount or the new indexation arrangements. 
• The main residence exemption is preserved and unchanged. 
• The four small business CGT concessions are unchanged. 
• The 60% CGT discount for qualifying affordable housing is fully retained. 

Important: The transitional rules require TWO separate calculations for any asset owned before 1 July 2027 and sold after that date. The taxable gain is the sum of: 

• Gain accrued BEFORE 1 July 2027 — calculated using the asset’s original cost base and its market value at 1 July 2027. The existing 50% CGT discount continues to apply to this portion. 
• Gain accrued FROM 1 July 2027 — calculated using the market value at 1 July 2027 as the new cost base, and the eventual sale price. CPI indexation and the 30% minimum tax apply to this portion. 

Taxpayers will need to determine the asset’s value at 1 July 2027 when they realise the asset, either by formal valuation (or quoted price for listed shares), or via an ATO apportionment formula based on the asset’s growth rate over its holding period. The ATO will publish tools to support this. 

Pre-CGT assets (acquired before 20 September 1985)  important change. 

Pre-CGT assets have historically been fully exempt from CGT. Under the new rules: 

• Gains accrued BEFORE 1 July 2027 on pre-1985 assets remain exempt (consistent with the original regime). 

• Gains accrued FROM 1 July 2027 on pre-1985 assets may be taxable under the new indexation and 30% minimum tax arrangements. 

In practical terms, an asset bought before 20 September 1985 and sold after 1 July 2027 will move from fully exempt to partially taxable. If you hold legacy assets in this category, we’d recommend talking to your adviser about whether sale timing or any small business CGT concession opportunities apply before 1 July 2027. 

Treasury estimates these reforms will support around 75,000 additional owner-occupiers over the next decade. 

Worked example (drawn from the Budget tax explainer): 

Jane buys an asset on 1 July 2022 for $800,000 and sells on 1 July 2032 for $1,600,000 (a 7.2% annual return). Using ATO tools, she determines the asset was worth $1,131,371 on 1 July 2027. Her taxable capital gain is the sum of: 

• Pre-commencement gain: $331,371 gross, halved by the 50% CGT discount = $165,685 taxable. 
• Post-commencement gain: $468,629 gross, less cost base indexation = $319,958 taxable. 
• Total taxable capital gain: $485,643 (vs $400,000 if the old 50% discount applied to the whole gain). At a 47% marginal rate, that’s $228,252 in CGT (vs $188,000 under the old rules) — about $40,000 more. 

2026–27 Federal Budget: For Small Businesses & SMEs

Permanent $20,000 Instant Asset Write-Off 

After years of one-year extensions, the $20,000 instant asset write-off becomes permanent from 1 July 2026 for small businesses with aggregated turnover under $10 million. Eligible assets costing less than $20,000 each can be immediately deducted in the year they’re first used or installed ready for use. 

• Estimated to save small businesses around $32 million per year in compliance costs and improve cash flow by around $890 million over five years. 
• Removes the annual uncertainty around whether the threshold will be extended meaning you can plan capital purchases with confidence. 

Loss Carry Back — Permanently Reintroduced 

From 2026–27, companies with turnover up to $1 billion that make a tax loss in the current year can carry that loss back to claim a refund against tax paid in the prior two income years. 

• This will benefit up to 85,000 companies, most of them small businesses. 
• Particularly valuable for SMEs investing to grow, those impacted by fuel and supply chain disruption, or those navigating temporary downturns. 

Loss Refundability for Start-ups 

From 2028–29, small start-ups in their first two years of operation will be able to receive a refund for tax losses, capped at the value of FBT and PAYG withholding tax paid on employee wages. Around 25,000 young companies a year are expected to benefit. 

Venture Capital & R&D Incentives 

To better support innovative, high-growth businesses: 

• Venture capital incentives expanded from 1 July 2027. The VCLP cap on eligible investee business assets rises from $250M to $480M; the ESVCLP cap rises from $50M to $80M; the ESVCLP tax-exempt cap rises from $250M to $420M; and the ESVCLP maximum fund size rises from $200M to $270M. 
• R&D Tax Incentive reform — the regime is being meaningfully overhauled. From 1 July 2028: 
• 4.5 percentage point increase to R&D offset rates across each category — meaningfully positive news for Australian innovators. 
• Premium offset rates rise from 8.5% to 13% (low intensity) and from 18.5% to 23% (high intensity). 
• Supporting activity R&D expenditure will be excluded from the regime — only core R&D activities will qualify going forward. 
• Turnover threshold for the refundable offset increases to $50 million. 
• Refundable offset eligibility now limited to companies less than 10 years old. 
• Minimum R&D spend increased from $20,000 to $50,000 (below this, R&D must be done with a Research Service Provider or Cooperative Research Centre). 
• Maximum R&D spend threshold increased to $200 million. 
• Intensity threshold reduced to 1.5%. 
• The Government estimates these changes will unlock around $400 million more in R&D by young firms each year. 

Cash Flow, Compliance & Tax Simplification 

• From 1 July 2027, small businesses will be able to opt in to monthly PAYG instalment reporting and payment. 
• Expanded access to the ATO’s dynamic PAYG instalments pilot, using business software to calculate instalments more accurately in real time. 
• The ATO will remove interest charges where businesses accidentally get an instalment variation wrong using ATO-approved calculators. 
• A White Tape Review (led by ASBFEO) and a Board of Taxation Red Tape Reduction Review are underway. 
• Sole traders are eligible for the $250 WATO and the $1,000 instant tax deduction alongside the other personal income tax cuts. 

Fuel and Supply Chain Relief 

For SMEs hit hardest by the global oil shock: 

• $1 billion in interest-free loans through the National Reconstruction Fund’s Economic Resilience Program for affected manufacturing and logistics businesses. 
• The ATO is streamlining temporary relief until 30 June 2026 — more generous payment plans, remission of interest and penalties, support for varying PAYG instalments and a dedicated channel for businesses to access help. 
• Some compliance and debt collection actions will be paused for the worst-affected industries. 
• $8.2 million in cost recovery relief for agricultural exporters. 

Trade, Tariffs & Regulatory Reform 

• 497 more nuisance tariffs abolished from 1 July 2026, bringing the total abolished to around 1,000 and saving businesses ~$157 million a year in compliance costs. 
• Free access to all standards referenced in Australian legislation — saving small businesses and tradies up to $1,600 a year. 
• The Australian Trusted Trader program is being expanded with $7.6 million to make exporting faster and easier. 
• The Australia–EU Free Trade Agreement is being implemented to lower trade barriers. 
• The ‘tell-us-once’ approach across government and $654.3 million to expand Digital ID will reduce duplicated reporting. 

For Businesses to Keep in Mind

30% Minimum Tax on Discretionary Trusts (From 1 July 2028) 

This is one of the most significant structural changes for SMEs that operate through a trust. From 1 July 2028, the trustee of a discretionary trust will pay a 30% minimum tax on the trust’s taxable income. 

• Beneficiaries (other than corporate beneficiaries) will receive non-refundable credits for the tax paid by the trustee. 
• Corporate beneficiaries will not receive credits (closing the ‘bucket company’ pathway). 
• Around half of all discretionary trusts are not expected to be affected in any given year; if a trust is already distributing to non-corporate beneficiaries on the 30% rate or higher, there will be no additional tax. 
• The Government estimates more than 90% of small businesses won’t be affected in any given year. 
• Exclusions include fixed and widely held trusts, complying super funds, special disability trusts, deceased estates, charitable trusts, primary production income (e.g. agriculture), certain income relating to vulnerable minors and amounts subject to non-resident withholding tax. 
• Three-year rollover relief from 1 July 2027 will be available to support small businesses that wish to restructure (e.g. into a company or fixed trust) without triggering income tax or CGT consequences. 
• The ASBFEO will be available from 1 January 2027 to help small businesses understand their options. 

For many family businesses currently distributing significant profits to adult beneficiaries on lower marginal rates, this is a fundamental change. If you operate through a discretionary trust, now is the time to start mapping out your structure options — there is time before the 2028 commencement, but restructuring decisions are not trivial. 

What The Budget Didn’t Address 

While the Budget is wide-ranging, several areas remain unresolved: 

• No clarity on the Bendel case and its broader implications for Division 7A. 
• No further reform of payroll tax beyond a commitment to work with the states on administration, harmonisation remains elusive. 
• No reduction to the 30% non-arm’s length income (NALI) penalty rate for SMSFs. 
• No new specific measures for franchisees beyond existing protections. 
• No deferral or reconsideration of the upcoming Division 296 super tax on balances above $3 million. 
• Limited new support for retail and hospitality outside the general business measures, despite continued cost pressures in those sectors. 

What Does The Budget Mean For Me? 

Whether you’re a small business owner, family with a discretionary trust, sole trader, employee, first-home buyer or property investor, this Budget will reshape some part of your financial picture between now and 2028–29. 

A few priority planning conversations to have soon: 

• If you run a small business, review your capital expenditure plans against the permanent $20,000 instant asset write-off, and revisit how loss carry back could support investment decisions. 
• If you operate through a discretionary trust, start scoping the impact of the 30% minimum tax and whether restructuring (using the three-year rollover relief) makes sense. 
• If you’re a property investor, understand the grandfathering rules — properties held before 7:30pm on 12 May 2026 are protected, but post-announcement decisions need careful thought. 
• If you’re a first-home buyer, the combination of CGT and negative gearing reform, the Help to Buy scheme, and the new Local Infrastructure Fund are designed to shift the balance in your favour. 
• If you’re an employee or sole trader, the WATO and the $1,000 instant tax deduction are automatic — but worth modelling against your usual deductions to see which approach delivers the better outcome each year. 

Want to know how the 2026–27 Budget affects your specific industry or business? Our accountants, bookkeepers, including financial advisers can help you assess how the changes may affect you and work through some possible strategies on how to accumalte wealth. 

Get in touch with Carbon to discuss your next steps. 

What The Budget Didn’t Address

While the Budget is wide-ranging, several areas remain unresolved:

• No clarity on the Bendel case and its broader implications for Division 7A.
• No further reform of payroll tax beyond a commitment to work with the states on administration — harmonisation remains elusive.
• No reduction to the 30% non-arm’s length income (NALI) penalty rate for SMSFs.
• No new specific measures for franchisees beyond existing protections.
• No deferral or reconsideration of the upcoming Division 296 super tax on balances above $3 million.
• Limited new support for retail and hospitality outside the general business measures, despite continued cost pressures in those sectors.

What Does The Budget Mean For Me?

Whether you’re a small business owner, family with a discretionary trust, sole trader, employee, first-home buyer or property investor, this Budget will reshape some part of your financial picture between now and 2028–29.

A few priority planning conversations to have soon:

• If you run a small business, review your capital expenditure plans against the permanent $20,000 instant asset write-off, and revisit how loss carry back could support investment decisions.
• If you operate through a discretionary trust, start scoping the impact of the 30% minimum tax and whether restructuring (using the three-year rollover relief) makes sense.
• If you’re a property investor, understand the grandfathering rules — properties held before 7:30pm on 12 May 2026 are protected, but post-announcement decisions need careful thought.
• If you’re a first-home buyer, the combination of CGT and negative gearing reform, the Help to Buy scheme, and the new Local Infrastructure Fund are designed to shift the balance in your favour.
• If you’re an employee or sole trader, the WATO and the $1,000 instant tax deduction are automatic — but worth modelling against your usual deductions to see which approach delivers the better outcome each year.

Want to know how the 2026–27 Budget affects your specific industry or business? Our accountants, bookkeepers, including financial advisers can help you assess how the changes may affect you and work through some possible strategies on how to accumalte wealth.

Get in touch with Carbon to discuss your next steps.

Author’s Note

The longer-tail reforms particularly the 30% minimum tax on discretionary trusts, the negative gearing and CGT changes, and the R&D Tax Incentive overhaul (with offset rates rising 4.5 percentage points and the exclusion of supporting activity expenditure) deserve careful thought. None of them take effect immediately, but each of them changes the calculus on structuring, investing, and long-term planning. We’d rather our clients have the conversation now, with time to plan, than be caught short in 2027 or 2028.

There is also a range of changes that may affect individuals and businesses with trusts or capital gains exposure, meaning forward‑looking tax planning will be increasingly important. For many of our small business clients, these measures are expected to deliver tangible cash‑flow benefits from 1 July 2026, and we encourage discussing appropriate strategies with your accountant to ensure the right structures and planning are in place.

The Budget also leaves some open questions. Division 296, the Bendel case, NALI and payroll tax harmonisation are all still unresolved. Implementation detail on the trust minimum tax, the CGT indexation arrangements, and the new venture capital settings will be released through consultation in the coming months and the practical impact will depend heavily on how the legislation lands.

As always, our role at Carbon is to translate the policy noise into practical, balanced advice. If you have questions, get in touch.

SOURCES: 2026-27 Federal Budget

DISCLAIMER: Information in this wrap-up blog was sourced directly from the Government’s Federal Budget website here.

Past Budgets:

2025–26 Federal Budget Summary Australia – Carbon Group
2024-25 Federal Budget: What It Means for Your Business and Personal Finances
2023 Federal Budget Wrap-Up
2022-23 October Federal Budget Wrap-Up
Federal Budget 2022 wrap up
How The Federal Budget Is Affecting Women’s Superannuation?
Federal Budget 2021 Wrap Up

“What should I be doing with the money outside the business?”

Investing is often seen as the next step. But without understanding how it fits into the broader financial picture, it may not always support long-term goals in the way people expect. For many business owners, the challenge isn’t just choosing investments. It’s understanding how those decisions connect to everything else from their business and cash flow, to risk and future plans.

1. The role of investing in your overall financial picture

Investing is often positioned as a way to grow wealth over time. For business owners, it can also represent a step towards building financial stability outside the business. However, investments rarely sit on their own. They are typically one part of a broader financial position that includes business income, personal cash flow, superannuation and long-term planning.

Without considering how these elements interact, investment decisions may not always deliver the outcomes expected. In many cases, the question isn’t just what to invest in, but how investing fits into the bigger picture.

2. Why business owners often overlook diversification

Many business owners naturally invest most of their time, energy and capital into their own business. While this can create significant value, it can also mean that a large portion of personal wealth is tied to a single asset or source of income. As a result, investing outside the business is often considered in the context of balancing that exposure.

Diversification can play a role in spreading risk, but what that looks like will vary depending on individual goals, timeframes and financial position. What works for one person may not necessarily apply to another.

3. The influence of online investment insights

Investment insights are now widely available through social media, podcasts and online platforms. While this can make investing feel more accessible, much of this information is general in nature and may not consider individual circumstances, structures or long-term goals. As a result, strategies that appear effective in one situation may not always translate in another. This doesn’t mean these insights aren’t useful, but it does highlight the importance of understanding how any approach aligns with your own financial position.

4. Understanding where investments sit within your financial structure

For many business owners, investments are made alongside running a business, contributing to super and managing personal finances. Because of this, investment decisions rarely sit in isolation. They may interact with tax structures, cash flow and long-term planning goals. In some cases, individuals hold investments across different structures, such as personal names, companies or superannuation. Each of these can carry different implications depending on how they are used.

What often matters most is not just what is being invested in, but how those investments align with the broader financial position. When decisions are made without considering this bigger picture, they may not always support the outcomes a person is working towards.

5. Aligning investments with long-term goals

Investments are often most effective when they are aligned with long-term objectives. These objectives may include building financial security, planning for retirement or creating flexibility in the future. Rather than focusing solely on short-term performance, many individuals begin to look at how investments contribute to their overall direction. Over time, this can support a more balanced and considered approach to financial decision-making.

How Carbon Wealth Management Supports Clients

As financial positions grow, decisions around investing, structures and long-term planning often become more interconnected. What starts as a simple question about investing can quickly expand into a broader conversation about how different parts of a financial position work together. At Carbon Wealth Management, we work with clients to help them understand how these pieces fit together, so they can make more informed decisions with greater clarity. Because we take a whole-of-picture approach, our focus is not just on individual investments, but on how each decision supports your broader financial goals.

Life events such as illness, injury, business disruption or unexpected personal circumstances can interrupt income with little warning. When that happens, the impact is rarely limited to one area. Cash flow tightens, plans are paused and stress quickly builds.

Understanding the role of risk management can help individuals and business owners prepare for uncertainty and create greater resilience when life does not go to plan.

1. Why income disruption is a common but overlooked risk

Many people focus on growing income but spend less time considering what would happen if that income stopped or reduced. For business owners, this risk can be even greater as income is often directly linked to their ability to work or generate revenue.

In Australia, illness and injury remain leading causes of extended time away from work. For others, caring responsibilities or unexpected business disruptions can have a similar effect. These events are common yet planning for them is often delayed or avoided.

2. The flow on effects of lost or reduced income

When income is disrupted, the impact can be immediate. Personal expenses, business overheads, loan commitments and staff costs do not pause simply because income changes.

For business owners this pressure can flow into both personal and business finances. Savings may be drawn down, decisions may be rushed and long term plans such as growth or retirement are often pushed aside.

Understanding the chain of effects highlights why income protection is not just a personal issue but a broader financial consideration.

3. Why growing businesses and busy professionals are especially exposed

As businesses grow, financial commitments often increase. Leases, staff, technology and personal obligations expand alongside success. At the same time many business owners and professionals rely heavily on their own capacity to generate income.

This reliance creates concentration risk. When one person is central to income generation, disruption can affect the entire operation. Recognising this exposure is an important step in understanding why risk management becomes more critical as success builds.

4. The role of risk management in maintaining stability

Risk management is about identifying areas of vulnerability and understanding how they could affect overall financial wellbeing. In the context of income, it helps individuals and business owners consider how disruptions could be managed rather than reacted to.

By thinking through potential scenarios, people can better understand where pressure points may arise and what level of protection or contingency may be appropriate for their circumstances. This awareness supports more informed conversations and calmer decision making during uncertain times.

5. Reviewing risk as life and business evolve

Risk exposure rarely stays the same. Changes in family structure, business size, debt levels and personal goals can all alter the level of risk faced over time.

What felt manageable a few years ago may no longer suit current circumstances. Regularly revisiting risk considerations helps ensure they remain aligned with how life and business actually look today rather than how they once did.

6. Creating confidence through awareness and preparation

While uncertainty cannot be removed entirely, understanding risk can help reduce its impact. Awareness creates confidence not because outcomes are guaranteed but because individuals and business owners feel more prepared to respond.

For many, this preparation supports peace of mind, allows focus to remain on building businesses careers and personal goals rather than worrying about what might go wrong.

Supporting conversations around risk

At Carbon, our Wealth team works alongside individuals and business owners to help them understand risk in the context of their broader financial picture. These conversations often connect closely with accounting bookkeeping and business advisory insights helping ensure decisions consider both personal and business realities.

By encouraging awareness and informed discussion we help support long term confidence even when life takes an unexpected turn.

But behind the congratulatory emails and champagne toasts sits a side of partnership that’s rarely discussed: the financial shift. When you become a partner, you don’t just earn more. You start operating like a business owner. That changes everything from how you pay tax to how you plan for super and protect your income.

Here’s what every new or soon-to-be partner should know before taking the leap.

You’re No Longer on PAYG

For years, your tax has been handled for you. You receive a payslip, the firm withholds PAYG tax and your only job is to lodge your annual return. That changes the moment you become a partner.

Your income will usually come through a partnership distribution, trust or company structure. This means you are now responsible for setting aside your own tax, managing BAS obligations and paying quarterly instalments.

It’s one of the biggest adjustments for new partners and can come as a shock when the first tax bill arrives. An accountant who understands professional practice structures can forecast your cash position and make sure your tax is managed proactively, not reactively.

Cash Flow Takes Centre Stage

As an employee, your income was predictable. As a partner, your earnings are tied to the firm’s profitability, client payments and overall performance. That is why financial visibility becomes so important.

Accurate bookkeeping isn’t just admin. It is the foundation for understanding how your practice is performing and when cash is available for drawings. Real-time reconciliations, automated billing and integrated systems like LEAP or Actionstep help you stay on top of inflows and outflows without manual effort.

Our bookkeeping specialists at Carbon work closely with legal practices to build clear, consistent reporting that takes the guesswork out of partnership finances. When your numbers are accurate, your decisions are sharper.

Superannuation Becomes Your Responsibility

Another big change is super. As a partner, you are now responsible for making your own contributions and it is easy to overlook when you are focused on growing your practice.

Super remains one of the most tax-effective ways to build long-term wealth. Setting up automated contributions, reviewing your fund’s investment mix and making sure you are on track to maximise your concessional cap are smart early moves. A financial adviser can help you find the right balance between reinvesting in your firm and investing in your future.

Protecting What You’ve Built

Partnership also brings greater financial responsibility and more to protect. It is time to think beyond professional indemnity insurance and consider cover that protects you personally.

Income protection, life insurance and total and permanent disability (TPD) and other risk insurances become especially important once your income depends on the firm’s success. The right cover gives peace of mind that if something unexpected happens, your financial security and your family’s future are protected.

Choosing the Right Structure

Not all partnerships are the same. Some firms bring on salaried partners, others offer equity arrangements, and many use hybrid models. The right setup can make a big difference to your tax position, liability exposure and long-term wealth planning.

Getting professional advice early helps you avoid costly mistakes later, whether that is around income splitting, GST registration or future succession planning. Our Accounting and Wealth teams work together to help partners set up correctly from the start and plan for what is next.

Stepping Up with Confidence

Becoming a partner should be exciting, not overwhelming. With the right advice and systems in place, you can enjoy the rewards of partnership without the stress of surprise tax bills or cash flow uncertainty.

We support lawyers and law firms through every stage of their financial journey, from bookkeeping and tax to wealth creation and insurance. We have helped partners across Australia simplify their finances, gain better visibility and plan for long-term success.

Ready to take the next step?

Speak to Carbon’s Accounting, Bookkeeping and Wealth specialists today to build your financial strategy for partnership and beyond.