Who can claim
This deduction is available to individuals and companies.
- An Australian resident individual or relevant trust holds an eligible post-CGT asset through 30 June 2027 and continues to hold it until a later realisation event.
- You hold a pre-CGT asset through 30 June 2027 and continue to hold it until a realisation event on or after 1 July 2027.
- You expect a CGT event on or after 1 July 2027 and the revised indexation, discount, residential-gain or minimum-tax rules may apply.
What you cannot claim
- Do not apply the post-1 July 2027 calculation to a CGT event that happens before 1 July 2027.
- The deemed-sale transition for post-CGT assets is limited to eligible Australian resident individuals and trusts. A company does not enter that transition merely because it holds a post-CGT asset across 1 July 2027.
- Eligible new residential dwelling and affordable-housing gains are excluded from the ordinary post-CGT transition and retain separate 50% discount rules.
- Foreign and temporary residency, pre-CGT status, trusts, companies and small-business concessions each change which transition provisions apply.
How the amount is worked out
For an eligible post-CGT asset, the resident individual or trustee is taken to sell it just before 1 July 2027 and reacquire it immediately after. The transition amount is the asset's market value just before 1 July 2027 unless the taxpayer chooses a method determined under section 112-185 when the later realisation event occurs. Any notional 30 June 2027 gain or loss is disregarded at transition and deferred until the income year of that later event, so the transition alone does not create an immediate tax bill. Calculate the deferred pre-transition result separately from the post-1 July 2027 result. For a residential asset, classify the residential portion using the number and extent of residential-accommodation days in the relevant pre- or post-July 2027 ownership period, excluding days for which the gain can reasonably be expected to be disregarded under the main-residence exemption. Eligible resident individuals and trusts can use post-transition cost-base indexation; the general 50% discount does not apply to ordinary post-1 July 2027 gains, while qualifying new residential dwelling and affordable-housing gains have separate rules. Pre-CGT assets have their own deemed sale, cost-base reset and CGT event K6 treatment. For the small-business 50% active asset reduction, the $2 million small-business-entity threshold is disregarded from 2027-28, but the other basic conditions continue to apply.
Records the ATO expects
- 30 June 2027 market valuation
- Full cost-base records
- Residency history
- Asset classification and ownership history
- Residential accommodation and main-residence-use calendar
Before you rely on this rule
The reform is enacted but does not change a 2025-26 or 2026-27 CGT calculation. Keep transition records before 1 July 2027.
Where this rule comes from
Primary source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49, 2026 — latest compilation). Reviewed 30 July 2026. Covers the From 2027-28 income years.