The Federal Budget announced on 12 May 2026 brought some of the most significant changes to investment taxation in decades. If you hold crypto in Australia, these changes affect you directly. The rules haven't become law yet, but the government has laid out the framework clearly enough that it's worth understanding now and planning ahead.
There are three major changes. Two of them matter a lot for crypto investors.
The three changes are:
1. The CGT 50% discount is being scrapped, from 1 July 2027
2. Discretionary trusts (like family trusts) will face a new minimum tax, from 1 July 2028
3. Negative gearing on investment properties will be restricted, from 1 July 2027
There is also a temporary window, running from 1 July 2027 to 30 June 2030, where people who hold assets inside a family trust can move them into a company structure without triggering a tax bill in the process.
Since 1999, if you held a CGT asset (like crypto, shares, or property) for more than 12 months before selling it, you only had to essentially pay tax on half the profit. This was called the CGT 50% discount.
For example: if you bought Bitcoin for $20,000 and sold it three years later for $70,000, your profit is $50,000. With the 50% discount, you'd only pay tax on $25,000. If your marginal tax rate is 47%, that's $11,750 in tax instead of $23,500. A very significant saving.
From 1 July 2027, the 50% discount will be replaced by indexation on your capital gains.
Indexation adjusts the original price you paid for an asset to account for inflation. The idea is that if you paid $20,000 for Bitcoin five years ago, and prices across the economy have risen by 13% since then, you should only be taxed on the "real" profit above and beyond what inflation alone would account for.
Here's an example:
You buy 1 Bitcoin for $150,000 on 1 July 2027. Five years later, you sell it for $250,000. Over those five years, inflation ran at about 2.5% per year, meaning prices rose a total of 13%.
Under indexation, the ATO adjusts your original purchase price: $150,000 multiplied by 1.13 equals $169,500. That's your "indexed cost base." You only pay tax on the difference between your sale price and that adjusted figure: $250,000 minus $169,500 equals $80,500.
At a 47% marginal tax rate, that's $37,835 in tax.
Under the old 50% discount system, you would have paid tax on $50,000 (half of the $100,000 profit), which at 47% is $23,500.
So the new system costs you over 60% more in tax in this example.
On top of indexation, the new system includes a rule that says you must pay at least 30% tax on your real (inflation-adjusted) gain.
For most working Australians on higher incomes, this minimum doesn't change anything because they're already paying 37% or 47%. But for retirees, stay-at-home partners, or adult children with low incomes who might otherwise pay little or no tax on their gains, this minimum tax will be a significant change. The ability to stream crypto gains to a low-income family member and pay relatively less or even no tax on them will effectively close.
"Grandfathering" is when a new rule applies going forward but existing situations are protected under the old rules. In this context, it means assets you already hold can still qualify for the old (current) 50% discount, but only if you sell them before the rules change.
Here's how it breaks down:
- If you bought crypto and sell it before 1 July 2027, nothing changes. The full 50% discount applies.
- If you bought crypto before 1 July 2027 but sell it after that date, it gets more complicated. The portion of the gain that built up before the changeover date will still get the 50% discount treatment. The portion that built up after that date will be under the new indexation rules.
- If you buy crypto after 1 July 2027, the new indexation system applies in full from day one.
The takeaway: if you're sitting on large unrealised gains in crypto that you were planning to sell within the next few years anyway, selling before 30 June 2027 could save you a significant amount of tax. For long-term holders, the difference between the old and new systems can be substantial, easily 60% or more on the same underlying gain. You should of course check this yourself with independent financial, tax and legal advice geared to your personal circumstances.
A family trust (technically called a discretionary trust) is a legal structure that some Australians use to hold investments. The trustee can choose each year which family members receive the income from the trust, and how much.
The classic strategy was to distribute investment gains to family members who earned less and therefore paid a lower tax rate, reducing the overall family tax bill. For example, distributing $18,000 of crypto gains to a non-working spouse or adult child who earns little else means that income could be taxed at 0% or very little as they were under the tax-free threshold.
From 1 July 2028, this changes significantly. Discretionary trusts will have to pay a minimum 30% tax on all their taxable income, regardless of who receives it or what tax rate they pay.
The trust pays the 30% upfront. Individual beneficiaries (family members who receive distributions) get a credit for the tax already paid, meaning they won't be double-taxed. But they won't get a refund if their own rate is lower than 30%.
There's also an important note for those who used to send trust income to a company (called a "bucket company") to lock it in at the lower company tax rate of 25% or 30%. Companies will no longer receive a credit for the trustee tax paid. This effectively kills that strategy.
For crypto held inside a family trust, this means every gain will now face at least 30% tax, and the ability to stream gains to low-income family members largely disappears.
Trusts that are NOT affected include fixed trusts (where each beneficiary's share is set in stone), widely held trusts, superannuation funds, deceased estates, charitable trusts, special disability trusts, and testamentary trusts already in place at 12 May 2026. Primary production income is also excluded.
Negative gearing is when an investment costs you more than it earns, and you use that loss to reduce your taxable income from other income sources like your salary. It's common in property investing.
From 1 July 2027, losses from established residential investment properties bought after 7:30pm AEST on 12 May 2026 can only be used against income from other residential properties (including rent and capital gains on property), not against your salary.
Properties already owned before Budget night are grandfathered, and new builds are treated separately as part of a housing-supply incentive. This change doesn't directly affect crypto investors because crypto isn't typically structured this way.
The indirect effect worth noting is that this change might push some wealthy investors away from property and toward other asset classes, potentially including crypto.
If you currently hold crypto inside a family trust, the government will be offering a temporary incentive to restructure. Between 1 July 2027 and 30 June 2030, you can move assets from a discretionary trust into a company without triggering a CGT event. That means no immediate tax bill just from making the move.
After 1 July 2028, trusts face that 30% minimum tax regardless of what you do with the money. A company, by contrast, simply pays its normal company tax rate (30%, or even 25% for certain companies) and then lets you choose when to pay yourself dividends.
You could wait until a year when your personal income is lower, such as a career break, parental leave, or retirement, and receive franked dividends from the company (dividends that already have tax credits attached) in a tax-efficient way.
There are important caveats though. This federal rollover relief does not cover state stamp duty. If your trust holds property as well as cryptocurrency, the stamp duty on transferring that property to a company could be very expensive, and you'd need to check the rules in your state.
You also can't informally withdraw cash from a company you own without it being treated as a dividend or a loan with tax consequences. And setting up a restructure properly takes time, including valuations, bank consent if there's a mortgage, and sometimes ATO clearance, so leaving it to 2030 is not advisable.
As always, you should not take this as advice - you should instead check this yourself against independent financial, tax and legal advice geared to your personal circumstances.
Review what unrealised gains you're sitting on. If you have crypto you were planning to sell in the next few years, running the numbers on selling before 30 June 2027 is worthwhile. The tax saving could be substantial.
Start keeping good records of your crypto's value as at 1 July 2027. Under the new rules, the ATO will use the market value on that date as a starting point for calculating which part of any future gain falls under the old system and which falls under the new one. You'll want clear records to substantiate any claims.
Look at whether you have any losses you could realise before 1 July 2027 to offset gains you're crystallising under the current, more favourable system.
Check whether your trust is a discretionary trust (affected) or a fixed or testamentary trust (likely not affected). If you're not sure, ask your accountant or tax or legal advisor.
Model out what a 30% minimum trustee tax would mean for your family's current arrangement from 1 July 2028.
If you're considering restructuring, start that conversation with your adviser well before the 2030 window closes.
Compare holding crypto in a company structure versus a trust going forward. The company structure becomes notably more attractive after 2028.
Plan when you'd want to pay yourself dividends, ideally in years when your personal income is lower.
Check stamp duty exposure in your state before triggering any rollover.
Superannuation is also worth considering for long-term crypto investors. Super funds pay a flat 15% tax rate on investment income and capital gains, significantly lower than the 32.5%, 37%, or 47% marginal rates that most working Australians pay personally. For assets held inside super for more than 12 months, a one-third CGT discount applies, bringing that effective rate down to just 10%.
This makes superannuation one of the most tax-efficient structures available under the new regime. The main trade-off is that money inside super is locked away until you reach preservation age, currently 60 for most people. To hold crypto inside super, you also need a Self-Managed Super Fund (SMSF), which has its own setup costs and compliance obligations. It's worth discussing with your financial, tax and legal advisers whether it suits your situation.
These changes have been announced but are not yet law. They are still in a consultation process. The broad framework and the dates appear settled, but details could change before legislation is passed. That said, the direction is clear enough that planning now makes sense, particularly given the 30 June 2027 deadline for locking in the current discount.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrencies, including Bitcoin, are highly volatile and speculative assets, and there is always a risk that they could become worthless.
Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
