Govt CGT changes are a material adverse policy shift

Mike Taylor

Managing Editor and Publisher

14 April 2026

The Federal Government’s draft legislation on foreign resident capital gains tax risks undermining tax certainty by retrospectively reopening transactions dating back to 2006, according to major accounting group, CPA Australia.

CPA Australia tax lead, Jenny Wong voiced the organisation’s concerns claiming the proposed amendments went well beyond clarification and amounted to a material policy shift.

Wong said the draft legislation proposes to retrospectively apply changes back to 2006, effectively altering the tax treatment of transactions entered into in good faith under the law as it was understood at the time.

“Retrospective tax changes of this scale fundamentally undermine certainty in the tax system,” she said.

“Applying new interpretations of the law back to 2006 sends a clear signal that the rules can change after the fact, and that makes Australia a less attractive place to invest,” Ms Wong said.

CPA Australia is particularly concerned that the changes could expose taxpayers to unexpected liabilities, including penalties and general interest charge, many years after transactions were completed.

“Reaching back almost 20 years to reopen settled transactions is deeply problematic.”

Wong warned the proposal echoed past tax changes that created prolonged uncertainty and disputes suggesting “this feels like the family trust election all over again – only worse”.

CPA Australia also criticised the short consultation period as wholly inadequate given the complexity and retrospective nature of the changes, limiting the ability to fully assess the implications for historic transactions, long-term investments and commercial structures.

“Two weeks is not meaningful consultation – it’s completely insufficient for reforms of this magnitude. This is a major shock for foreign investors and the professionals who advise them,” Wong said.

She claimed retrospective application risked increasing disputes and compliance costs, creating inefficiency for both taxpayers and the Australian Taxation Office.