Australia: Loss carry back tax offset, small business instant asset write-off bill passes Parliament with negative gearing amendment
Aside from negative gearing amendment, provisions of the bill remain the same.
A bill that seeks to implement a loss carry back tax offset for corporate tax entities that are not significant global entities and permanently extend the AU$20,000 instant asset write-off for small businesses, has passed Parliament with an amendment related to negative gearing.
The amendment, which was introduced to the House of Representatives, introduces relationship circumstance protections for asset holders with grandfathered negative gearing and capital gains tax discounts. Specifically, the amendment provides that an individual can retain access to negative gearing for an ownership interest in a property where:
- The property was acquired from a spouse through an inheritance or relationship breakdown
- Someone inherits part or all of a property in which they already had an ownership share
Aside from the negative gearing amendment, the provisions in the rest of the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 remain the same:
- Allowing corporate tax entities that are not significant global entities to carry back a tax loss for an income year commencing on or after July 1, 2026, and apply it against tax paid in either or both of the two previous income years
- Making permanent the AU$20,000 instant asset write-off for small businesses (with an aggregated annual turnover of less than AU$10 million) to immediately deduct the taxable purpose proportion of eligible depreciating assets costing less than AU$20,000, that are first used or installed ready for use for a taxable purpose on or after July 1, 2026, as well as suspend the low pool value threshold's five-year lock out rule to June 30, 2027
- Providing an income tax exemption for income derived in respect of employment with the PNG Chiefs Limited, being the new Papua New Guinea based NRL franchise