2026 Federal Budget: What the new Capital Gains Tax Rules mean for Financial Services businesses - trusts and superannuation

While much of the commentary on the 2026 Federal Budget has focused on individuals and family trusts, the implications for trust-based investments and superannuation funds are both significant and more complex than they first appear. 

At a headline level, superannuation concessions remain largely intact and foreign investors appear relatively insulated, other than for investments that will now be brought within the scope of an expanded non-resident CGT regime. However, beneath the surface, the reforms introduce a significant shift in how capital gains are calculated, will need to be tracked and reported - potentially creating material operational and governance challenges for trustees, fund managers, custodians and advisers. 

How does the 2026 Budget change capital gains tax for trusts? 

The centrepiece of the CGT reforms is the replacement of the 50 per cent CGT discount with a return to cost base indexation for assets held for more than twelve months, along with a 30 percent minimum tax on net capital gains for individuals, trusts and partnerships from 1 July 2027. For trusts and managed investment vehicles, this marks a structural change rather than a simple rate adjustment. 

Why will administration of trust structures become more complex? 

Managing dual CGT regimes 

From 1 July 2027, trusts will need to manage parallel CGT systems: 

• Pre‑1 July 2027 gains, potentially eligible for the existing CGT discount 
• Post‑1 July 2027 gains, calculated using indexation.

This immediately creates challenges across: 

• Asset‑level tracking and parcel selection 
• Capital gain streaming and attribution 
• Audit support and compliance consistency. 

In practice, this complexity arises not from the trust structure itself, but from administering different CGT outcomes for economically identical assets. For example, fungible investments such as listed shares may comprise parcels held before and after 1 July 2027, giving rise to different tax outcomes notwithstanding identical market values. This, in turn, raises practical questions around parcel selection, attribution and the potential application of “fair and reasonable” methodologies under AMIT regimes. 

Reviewing tax allocation methodologies

Managed funds, trustees and custodians will need to review whether existing methodologies for allocating gains, losses and expenses remain appropriate under the proposed dual CGT regime. This may include consideration of capital loss utilisation, expense allocation between income and capital, and the treatment of pooled CGT outcomes where indexed and discounted gains coexist. 

For pooled vehicles, even small changes in methodology may have a material impact on after‑tax investor outcomes, directly influencing product competitiveness and investor behaviour. This is likely to be particularly relevant for funds with significant unlisted or illiquid assets, where establishing reliable market values at 1 July 2027 may involve additional cost and could influence hurdle rates and expected returns. 

What system and reporting changes will be required? 

The reforms will likely necessitate a significant uplift in systems capability, affecting: 

• Fund accounting and tax calculation engines 
• Unit registry and investor reporting platforms, to the extent they support investor‑level tax components, attribution reporting or enhanced disclosure requirements 
• Distribution and attribution reporting processes.

New requirements may include: 

• Separate disclosure of gross capital gains and the components calculated under indexation and discount methodologies, where required to support attribution, reporting and investor transparency 
• Enhanced explanations of tax outcomes in investor statements and PDSs.

For many managers, this may not be an incremental update, but require a transformation program. 

How are superannuation funds affected? 

At a headline level, superannuation remains relatively protected: 

• The 1/3 CGT discount for complying super funds is retained 
• The proposed 30 per cent minimum CGT tax does not apply directly to super funds.

However, most super funds invest through trust structures such as: 

• Managed investment trusts 
• Unit trusts 
• Private market and alternative vehicles.

This raises unresolved questions, including: 

• Can a super fund apply its 1/3 discount to indexed or a combined gain (50 per cent CGT discount for pre-1 July 2027 gains and indexation for Post 1 July 2027 gains)? 
• How will CGT attributes flow through from trusts to super funds? 
• Will additional disclosures be required from underlying investment vehicles? 

These questions highlight the importance of early legislative clarity and timely engagement between government, industry and advisers to ensure consistent implementation across trust and superannuation structures. 

What does the 30 per cent minimum tax mean for trusts? 

The proposed 30 per cent minimum tax on capital gains introduces additional considerations, particularly the need for funds to confirm and document their status as fixed or widely held trusts in order to avoid the tax applying at the trustee level.

While it is expected that widely held and fixed trusts may apply the tax at the investor level, there is limited detail on: 

• Practical implementation mechanics 
• Potential withholding-style approaches 
• Interaction with attribution regimes and trust streaming rules.

For discretionary trusts, the position is clearer, with the minimum tax expected to apply at the trustee level. 

What should trustees, fund managers, custodian and investors do now? 

Trustees and fund managers should focus on understanding how the proposed reforms interact with their existing investment structures and reporting processes, and on engaging early with custodians and administrators to assess readiness ahead of 1 July 2027.

In practical terms, this includes understanding how assets will be valued at the 30 June 2027 transition date for CGT purposes, particularly where indexation applies. Early consideration of valuation approaches, especially for unlisted assets, should assist trustees and fund managers in planning for implementation once legislative detail is finalised. 

How can BDO help 

The 2026 Federal Budget does not merely adjust tax rates, the proposed changes to the CGT regime will have a flow on impact to the administration and reporting for trust‑based investment structures.

Early engagement and preparation for the proposed CGT changes will assist trustees and fund managers implement the reforms efficiently once the final legislative framework is settled. It should also drive certainty for investors, trustees, fund managers, custodians and super funds by aiding:

• Clarity in after‑tax outcomes 
• Investor confidence 
• Long‑term competitiveness.

See how BDO can support your organisation across tax, superannuation and private wealth services. Explore our 2026 Federal Budget insights for more information on how the Budget will affect you.