Australia’s 2026 Tax Reforms: How to Prepare if You Hold Cryptocurrency

You may have held crypto through several cycles, using familiar tax rules to shape your long-term strategy. Then a single Federal Budget changes the rules of the game, and suddenly the old planning tools are not enough.

Australia's 2026–27 Federal Budget sets out major reforms to capital gains tax and trust taxation that directly affect digital asset investors. The measures were announced on 12 May 2026 and are subject to the passage of legislation, but the policy direction is now clear enough to plan around. Getting across the timelines and options early will make it easier to adjust, rather than scrambling as deadlines approach.

The end of the capital gains discount

In Australia, cryptocurrency is generally treated as a capital asset. That means these reforms apply to most digital currency investments, whether you hold bitcoin, ether, stablecoins, or a diversified portfolio of tokens.

The headline change for everyday investors is the removal of the 50% capital gains tax (CGT) discount going forward (subject to grandfathering, see below). In its place, the government is introducing an indexation system, together with a 30% minimum tax floor on gains.

This does not happen overnight. There is a short window where the current discount continues to apply, but once that closes, all new gains will be caught by the new rules.

The grandfathering window

The government has built in a transition period before the new system bites fully. In practice, selling assets before the 1 July 2027 changeover is the main way to permanently lock in the existing CGT discount.

Here is how timing affects you:

• Assets bought and sold before 1 July 2027 keep access to the full 50% CGT discount.
• Assets bought before, but sold after, 1 July 2027 get the 50% discount only on the part of the gain that accrued before that date. The remaining gain is taxed under the new indexation and minimum-tax rules.
• Assets bought on or after 1 July 2027 fall completely under the new regime.

After 1 July 2027, the market value of your asset on that date becomes a deemed cost base. This means your capital gain is effectively split into two parts, one under the old rules and one under the new rules.

For the 1 July 2027 valuation, Treasury has indicated you will be able to either obtain a formal valuation or use an ATO-published apportionment formula based on growth over the holding period. For liquid crypto with a quoted exchange price on that date, this should be straightforward, but good records around long-held positions or illiquid tokens will be especially important.

How the new indexation method works

Under the new system, your original purchase price is adjusted for inflation using the Consumer Price Index (CPI). Only the gain above this inflation‑adjusted cost base is taxed.

On top of that, a 30% minimum tax floor will apply to capital gains. This is likely to affect investors on lower marginal tax rates the most. Higher income earners will mainly feel the impact through the loss of the simple 50% discount that previously applied after 12 months.

A simplified example helps make this concrete.

Imagine an investor buys 1 bitcoin for AUD $150,000 after 1 July 2027, then sells it five years later for AUD $250,000.

• Assume cumulative inflation over those five years is 13%.
• The indexed cost base becomes AUD $150,000 × 1.13 = AUD $169,500.
• The taxable capital gain is the sale price minus the indexed cost base, which is AUD $250,000 − AUD $169,500 = AUD $80,500.
• At the top marginal tax rate of 47%, the tax bill on this gain would be AUD $37,835.

Under the current rules, with a 50% CGT discount, the taxable portion of the AUD $100,000 gain would be reduced to AUD $50,000. At a 47% marginal rate, that would mean tax of AUD $23,500.

In this scenario, the new system significantly increases the tax paid. That is because historically, crypto prices often grow much faster than general inflation, so the benefit from indexation is usually smaller than the benefit from a flat 50% discount.

For investors who have relied heavily on the CGT discount as part of their strategy, this change is a strong signal to review long‑term holding plans and exit timing.

Navigating trust changes and rollover relief

Many Australian investors use discretionary trusts to hold family assets, including crypto. These structures can help with estate planning, asset protection, and flexible income distribution across beneficiaries.

From 1 July 2028, discretionary trusts will face a 30% minimum tax on net income, paid by the trustee at the trust level. Non-corporate beneficiaries will receive a non-refundable tax credit for their share of the tax already paid, which can be applied against their personal tax bill. Corporate beneficiaries receive no such credit. The practical effect is that 30% becomes a hard floor on the rate applied to trust income, which shuts down a common strategy of distributing capital gains to low‑income or non‑working family members to take advantage of their lower marginal tax rates.

The new minimum tax will not apply to every trust. Announced exclusions include fixed trusts, widely held trusts, complying superannuation funds, special disability trusts, deceased estates, charitable trusts, primary production income, and testamentary trust income that existed at 12 May 2026. If your structure falls into one of these categories, the impact may be limited.

To soften the disruption for everyone else and provide a path to restructure, the government is introducing a temporary rollover relief period from 1 July 2027 to 30 June 2030. During this window, you can transfer assets held in a discretionary trust into a company or fixed trust structure without triggering an immediate capital gains tax event, provided the rollover conditions are met.

Some potential advantages of shifting digital assets into a company include:

• Company tax rules offer more predictable tax rates on realised gains compared with variable personal marginal rates.
• Profits can be retained in the company and distributed as franked dividends in years when your personal income is lower, which can help smooth your overall tax burden.
• Corporate structures are often clearer and more straightforward when you plan to sell part of your portfolio, bring in new investors, or transfer control in future.

This does not mean every trust should be unwound, or that companies are always better. It does mean that existing trust structures holding crypto should be reviewed carefully before the 2028 deadline. You should of course check this yourself with independent financial, tax and legal advice geared to your personal circumstances.

Red flags and risks to watch

Restructuring a portfolio under time pressure and dealing with complex rules can increase the risk of errors, unexpected tax outcomes, and falling for scams.

Some key issues to watch:

• State and territory stamp duty is not covered by the federal rollover relief. If your trust also holds Australian real property, such as residential or commercial real estate, transferring those assets could trigger large stamp duty liabilities at the state level.
• Informal withdrawals from a company (for example, using company funds for personal expenses without proper documentation) can be treated as unfranked dividends or as loans under Division 7A rules. These can attract heavy tax penalties if not managed correctly.
• Scammers often use confusing regulatory changes as a hook. Be highly sceptical of unsolicited offers that promise guaranteed tax loopholes, automated "trust to company" smart contracts, or services that ask for your seed phrase or private keys so they can "register" your crypto for the new tax system.

If something sounds too good to be true, or you are being pushed to move quickly without independent advice, step back and verify the details with a licensed professional.

Action checklist for investors

Preparing for these tax reforms starts now, not in 2027 or 2028. A practical checklist might include:

• Review your unrealised gains to see whether selling some positions before 30 June 2027, and capturing the 50% CGT discount, suits your personal situation.
• Organise accurate valuation records for 1 July 2027, including transaction histories and fair market values, so you can support your deemed cost base calculations later.
• Speak with a qualified tax and legal adviser or financial planner about possible tax‑loss harvesting and other strategies that may offset gains before and after the rule changes.
• Audit existing trust arrangements to understand how the 30% minimum tax from 1 July 2028 will affect your current income streaming and family wealth plan, and check whether any of the announced exclusions apply to your structure.
• If appropriate, model what a company structure might look like for your crypto investments, including set‑up costs, ongoing compliance, and franked dividend planning.

Summary

Australia's 2026 proposed tax reforms mark a significant shift in how digital asset wealth is taxed. The focus is moving away from a broad CGT discount, toward inflation indexation, a 30% minimum tax on gains, and greater use of company structures instead of discretionary trusts.

Investors who act early have more options. Using the period before 1 July 2027 and 1 July 2028 to reassess portfolios, revisit trust arrangements, and secure any remaining benefits under the current rules can help reduce long‑term tax drag and avoid rushed decisions.

As always, tax rules are complex, and small details can have large impacts. Personalised, professional tax, legal and financial advice is essential before you make structural changes or large disposals.