Proposed Changes to the Taxation of Discretionary Trusts
Bill Orow
In the recent federal budget, the Government proposed the introduction of a 30 per cent minimum tax on discretionary trusts.
The claimed purpose is “to improve the fairness of the tax system and help fund new tax cuts for workers.”
From 1 July 2028, trustees will pay a minimum tax of 30 per cent on the taxable income of discretionary trusts.
Beneficiaries, other than corporate beneficiaries, will receive non-refundable credits for the tax payable by the trustee.
The purpose of this seminar is to consider the proposed changes and their implications to current trust structures and asset holding.
Significantly, the proposed changes contain exclusions and will provide expanded rollover relief for three years from 1 July 2027 to permit restructure out of discretionary trusts into another entity type, such as a company or a fixed trust.
