What the Budget Means for Selling an RTO
- Shiv Jaidka
- 2 days ago
- 2 min read
The 2025 Federal Budget has delivered what's being called the most significant tax reform in 25 years, and if you're an RTO owner, there's a closing window you need to be aware of.
From 1 July 2027
Just 14 months away, the current 50% Capital Gains Tax (CGT) discount will be replaced with a minimum 30% tax on real capital gains. For RTO owners considering a future sale, this is a game-changer.
While the small business CGT concessions remain in place (which is good news), the new rules introduce a critical opportunity that many RTO owners aren't aware of.
The "Split" That Could Save You Money
Under the new legislation, you'll be able to split your capital gains into two parts:
Value accrued before 1 July 2027 – still protected by the existing 50% CGT discount
Value accrued after 1 July 2027 – taxed under the new rules
This split could result in significant tax savings on a future sale, but only if you can prove to the ATO what your RTO was worth on 1 July 2027.
Why RTO Valuations Are Different
Valuing an RTO isn't like valuing other businesses. A generic business calculator or simple appraisal won't cut it. The ATO and courts require a defensible, documented valuation that accounts for:
Scope of registration
Compliance history
Funding contracts
Student pipeline
Internal systems
Goodwill
Industry and regulatory factors
Two RTOs with identical revenue can sell for vastly different amounts depending on these underlying drivers.
Additional Consideration: Family Trusts
If your RTO sits inside a family or discretionary trust, there's another change to note. From 1 July 2028, a proposed minimum 30% tax on trust income will come into effect. Restructuring relief is available, but it comes with conditions, costs, and a limited window.
The Bottom Line
This isn't a reason to panic, but it is a reason to act. Whether you're planning to sell soon or not for years, having a defensible valuation of your RTO before the July 2027 deadline is no longer optional. It's essential for protecting your options and potentially saving significant money in taxes.
Selling your RTO or training business is one of the most important decisions you’ll make. Stay informed, plan, and set your organisation up for success.
Infinity Business Brokers are highly experienced RTO sales, acquisitions and mergers specialists. They are Australia’s leading RTO sales authority, having brokered over $140 million in RTO sales.
RTO Investment Strategist
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