Persona 07 — Greg, pre-retiree with a large share portfolio

Profile

• Age: 58
• Occupation: Senior IT manager, $215,000 income
• Plan: retire at 65, transition-to-retirement super pension afterwards
• Investments:
  • ASX shares (CHESS-sponsored) — $480,000 portfolio, mostly bought between 2014 and 2022, average gain ~110%
  • SMSF — $1.6M; mostly Australian equities; runs his own. Excluded from the changes (see below).
• Housing: owner-occupied, no mortgage.

Their universe of policies

• Theme 04 §4.2.1 — CGT indexation
• Theme 04 §4.2.2 — 30% min tax on capital gains
• Theme 04 §4.2.4 — Transitional CGT rules
• Theme 04 §4.1 — Personal income tax

Scenarios

Scenario A — He sells $100k of CSL bought in 2015 for $35k, on 1 July 2030

• Policy: §4.2.4 transitional — pre-1 July 2027 gains use 50% discount; post-1 July 2027 gains use indexation + 30% min.
• Source: tax-explainers-negative-gearing-capital-gains-tax.docx.
• Mechanic: Greg gets a quoted valuation of the parcel as at 1 July 2027 (say, $80k). Pre-1-Jul-27 gain = $80k − $35k = $45k → 50% discount → $22.5k taxable. Post-1-Jul-27 gain = $100k − $80k = $20k → indexation reduces this by 3y × 2.5% inflation ≈ −$6k → $14k real gain → at his 45% marginal rate it's >30% so the minimum tax doesn't bite. Total taxable gain = $36.5k → tax at 47% (incl Medicare) = $17,160.
• Comparison to status quo: 50% discount across all $65k = $32.5k taxable × 47% = $15,275. So new regime costs Greg ~$1,885 more on this one parcel.

Scenario B — His SMSF is excluded

• Policy: §4.2.3 last paragraph — "widely-held trusts (for example, most managed investment trusts) and superannuation funds (including SMSFs) will be excluded" from negative-gearing changes; CGT changes only apply to individuals, partnerships, trusts.
• Mechanic: Greg's SMSF continues with 15% accumulation phase / 0% pension phase treatment and the 1/3 CGT discount in accumulation. No change at all from this Budget for the super wrapper.

Scenario C — He brings forward sales to before 1 July 2027

• Policy: §4.2.4 — "there is no incentive to buy or sell assets before this date" (Treasury). All gains accrued before 1 July 2027 continue to use the 50% discount regardless of sale year.
• Mechanic: Greg has no incentive to crystallise gains pre-July-2027 because his pre-1-July-27 share of any future gain will get the 50% discount anyway. The tax-engineering opportunity is structural, not timing.

Scenario D — He retires at 65 and his marginal rate falls

• Policy: §4.2.2 — 30% min tax.
• Mechanic: When Greg retires and his other taxable income drops below the $45,000 threshold, his marginal rate is 14% (post-2027). Without the minimum tax, a $50,000 capital gain after indexation might be taxed at his ~14-30% personal rate. With the minimum tax, he pays 30% — closer to the rate paid on the income he earned over his working life. This is the explicit Treasury intent (Jack cameo).
• Numbers: $50k post-indexation gain. Personal-rate calculation: would normally be ~$8,000 tax (16-30% blended). Minimum tax adds ~$7,000 to bring effective rate to 30% → $15,000 total.

Scenario E — The carry-forward losses from his small property portfolio are now ringfenced

• Policy: §4.2.3 — losses on residential properties bought after 12 May 2026 only offset residential property income.
• Mechanic: Greg buys a new build in 2028 to negatively gear into retirement → new build is exempt → full negative gearing preserved (cross to Persona 06 Scenario E).

Bottom-line — long-horizon impact

Calculator settings

Open calculator/index.html:

• Investments tab: Add 5-10 share parcels with their original purchase dates and cost bases. Toggle "treat as held through 1 July 2027" to see the apportioned-CGT calculation per parcel for any chosen sale year.
• Time-horizon control: slide the "Sale year" from 2027 to 2045 to see how the indexation discount evolves with assumed inflation.
• Retirement mode: lower marginal rate to see the 30% minimum-tax floor kick in.