The 30% trust tax: should you restructure before 2028?
Understand the proposed 30% minimum tax on family trusts, who it may affect, and how to weigh restructuring.
Free guideWhy it matters.
Many families hold a business, an investment property or a share portfolio in a discretionary trust. Each year the trustee decides who receives the income, so it can go to family members on lower tax rates or to a bucket company.
The Government has proposed a 30% minimum tax on discretionary trust income, charged at trustee level from 1 July 2028. As at 15 October 2026 it is not law: the rate bill was introduced on 14 October 2026 and is still before the House of Representatives. Individual beneficiaries would get a credit for the trustee tax, but it wouldn't be refundable, and company beneficiaries would get no credit at all.
That leaves trustees with a hard call. Restructure too early and you may pay transfer costs for little benefit. Leave it too late and the trust starts the new regime in its old structure.
What the guide covers.
After reading this guide, you'll know whether the proposed 30% trust tax is likely to affect your family trust and what to do before 2028.
- Which trusts and types of income the announced design covers, and which it excludes
- Why being in scope doesn't always mean paying more, depending on who receives distributions
- How bucket companies, capital gains and franked dividends are affected
- The options if restructuring makes sense, from keeping the trust to moving to a company or fixed trust
- The tax and duty costs of moving assets, and how the proposed rollover would work
- A timetable of what to do now, from 1 July 2027 and before 1 July 2028
Don't leave it to chance.
Restructuring a trust is expensive to undo. Moving assets can trigger capital gains tax, stamp duty and GST, and distributions outside the elected family group can attract family trust distribution tax at 47%. Acting on the headline rate alone could cost more than the new tax would.
We start by reviewing your trust deed, elections, income mix and who your distributions go to. Then we model what the proposed tax would cost your family in the current structure, and compare that with keeping the trust, moving the business into a company or using a fixed trust. Once the final law and rollover rules are settled, we help you decide and carry out any change that's worth making.
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This page and the guide are general information only and don't consider your personal circumstances. Speak with us before acting on them.