It is also understood that, following strong lobbying by Labour Waimakariri MP Clayton Cosgrove, there will be a five-year moratorium on the tax applying to gains from the sale of residential and commercial property in earthquake-stricken Christchurch.
The exemptions come on top of those which have already leaked out in advance of today's official launch of Labour's economic policy, which is being touted as a "bold" prescription for lifting New Zealand's economic game.
Other exemptions will include the family home and inherited assets, while dollar thresholds will be set before gains on the sale of other personal assets are subject to the otherwise broad-based tax, which is expected to be set at a rate of 15%.
As part of its pledge to leave the great majority of people better off as a result of its overall tax changes, Labour will exempt the first $250,000 in gains realised from the sale of small business assets to protect those who have invested in their businesses as a means of saving for their retirement.
The owner will have to be above a certain age - probably 55. He or she will have to have owned the business for 15 years and still be working in that business.
The exemption would benefit more than 324,000 sole owner-operator enterprises which make up nearly 70% of all businesses.
More than 90% of all New Zealand businesses have fewer than 10 employees, but it was not clear last night how Labour was defining what qualified as a "small business".
Sorting that out would be delegated to a panel of tax experts which would be tasked with resolving the complex technical issues involved in constructing a viable and loophole-free capital gains tax.
That means such a tax is unlikely to take effect before October next year at the earliest, should Labour win this November's election.
Other tax changes would see the introduction of a $5000 threshold before income tax kicks in, along with a new top tax rate as high as 39c for every dollar earned above the $120,000 level. The current top rate of 33c applies on all income over $70,000.
It is understood Labour's private polling suggests most New Zealanders disapprove of a capital gains tax. However, they are more supportive when the tax is contrasted with National's preference for state asset sales as a means of reducing the country's debt.
Labour leader Phil Goff yesterday maintained his stance of not commenting on the contents of Labour's economic package in anything other than general terms ahead of the policy launch today, at Westpac Trust stadium, in Wellington.
The choice of venue suggests the party is pulling out the stops with what is expected to be a slick production, designed to jolt voters by showing Labour has a plan for the economy - and that National does not.
"We'll make some hard decisions tomorrow," Mr Goff said. "They'll be bold decisions. They'll be decisions not focused simply on an election in four months' time but what this country needs long term."