For Discretionary Trust Holders & Family Businesses

Written By Michael Jones

⚠️ 30% Minimum Tax on Trust Distributions — From 1 July 2028

This is arguably the most significant change for Perth family businesses and private investors. From 1 July 2028, trustees of discretionary trusts will be required to pay a 30% minimum tax on taxable income distributed from the trust.

This fundamentally changes the income splitting strategy that many families have used legitimately for decades — distributing income to lower-taxed beneficiaries (adult children, a lower-income spouse) to reduce the overall family tax bill. From 2028, those distributions will be taxed at a minimum of 30% regardless of the beneficiary's marginal rate.

Beneficiaries already on a marginal rate of 30% or above are largely unaffected. Some categories of trust income are excluded, including primary production income.

Not all trusts are caught. Fixed trusts, widely held trusts, SMSFs, special disability trusts, deceased estates, and charitable trusts are excluded.

✅ Restructure Rollover Relief — From 1 July 2027

To help businesses adapt, the government will provide expanded rollover relief for three years from 1 July 2027, allowing small businesses and individuals to restructure out of a discretionary trust into a company or fixed trust structure without triggering immediate CGT consequences. The Australian Small Business and Family Enterprise Ombudsman will be available from January 2027 to assist with options.

If restructuring is on your radar, this window is worth planning for now.

Michael Jones

Michael is an accomplished executive and business owner with a rich, multi-industry background spanning aged care, NDIS, oil & gas, finance, taxation & business services, retail, hospitality, arts, and education.

His extensive experience across both profit and not-for-profit sectors includes significant C-Suite roles and board positions, offering him unique insight into the operational and strategic needs of diverse organisations.

With over 30 years in corporate finance and accounting, Michael brings a comprehensive understanding of business operations from the ground up. As a Chartered Accountant, an Associate of the Tax Institute, and a registered ASIC and tax agent, his technical and professional expertise is highly respected across industries.

Michael has also lectured, presented papers at a number of conferences, facilitated corporate training & workshops, and written numerous online articles, sharing his insights and experience to support business and professional development.

https://www.linkedin.com/in/mfrjones/
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