Prime Minister Anthony Albanese has unveiled carve-outs for small businesses and start-ups from the government's sweeping tax changes, while also exempting discretionary trusts used in wills. 

Under the revised measures announced on May 12, the government will cut the capital gains tax discount from 50 per cent and replace it with a 30 per cent flat rate indexed to inflation.

But the government has now announced significant exemptions to the proposed reforms for small businesses and tech start-ups.

The government will significantly increase the threshold for small business capital gains tax concessions following strong backlash from industry groups over its budget reforms. 

'Today we're an we're announcing that we will increase the turnover threshold for existing small business 50 per cent active asset CGT concession from $2 million to $10 million,' Albanese said.

'Obviously, we'll increase the new threshold by five times, bringing into line with the threshold for small businesses, that's there in a number of other features of the system.

'We're also proposing to introduce a new innovative business tax concession for startups, and we'll release the consultation paper on the startup sector later this morning.'

Discretionary trusts will also be exempt from the minimum tax in cases where they are established for 'genuine testamentary purposes' - which had been nicknamed a 'death tax' by those in opposition. 

'We're confirming the government will exempt income from all types of discretionary testamentary trusts from the minimum tax, provided they are established for genuine testamentary purposes,' he said.