The Albanese government is set to unveil carve-outs to its divisive capital gains tax reforms, with start-ups and small businesses likely to be spared from some of the toughest changes.

Under the reforms, the current 50 per cent capital gains tax discount would be scrapped and replaced with a system that adjusts gains for inflation and imposes a minimum tax rate of 30 per cent.

From July 2027, Australians who sell assets such as shares, businesses or farmland would no longer automatically receive a 50 per cent tax discount on their profits.

Treasurer Jim Chalmers is expected to release draft proposals for the carve-outs this week as the government races to pass the legislation through parliament before the end of the month, the AFR reports.

The proposed exemptions are expected to focus on start-ups and biotech firms, whose owners argue they would be among the hardest hit by the changes because their businesses are often built with very little upfront investment.

The carve-outs would allow eligible businesses to continue using the existing 50 per cent CGT discount.

The government is also considering raising or indexing the $2 million turnover threshold that allows eligible small businesses to access CGT concessions.

Business groups argue the cap, which has remained unchanged since 1997, should be increased to $6 million.

Last week, Prime Minister Anthony Albanese refused to confirm whether additional carve-outs were being considered.

'All of the existing carve-outs and exemptions remain and there are four of those significant ones for small business,' he told the ABC.

'The taxation being based upon real gains is a sensible way forward. It's also a sensible thing to do to treat more equally income from work.'