The proposal would replace the proposed Innovative Business Capital Gains Tax Concession (IBCC) with one of the following options:

• Option 1: Exclude all active assets from the indexation method for calculating CGT, allowing owners, employees and investors to retain a 40% CGT discount on capital gains from these assets.
• Option 2: As per Option 1 but with a 35% CGT discount.

Transition arrangements (grandfathering) would mirror the Budget proposal for cost base indexation. The 50% capital gains discount would remain for gains made prior to 1 July 2027.

The policy would commence from 1 July 2027.

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