Trusts, without the fog.
What a trust is, which one does what, and what the proposed 30% minimum tax means for the money you receive. Two minutes to get the gist. Read on for the detail.
A trust is a relationship, not a company
Someone holds assets for the benefit of others, under rules written in a deed. Three roles. One rulebook.
The deed
The rulebook. Says who can benefit, what the trustee can do, and who's in control.
The trustee
Legally owns the assets and makes the decisions. Usually a company you control.
The beneficiaries
The people (or entities) who receive income and capital. They pay the tax on what they receive.
Who really holds the power? The Appointor. They can hire and fire the trustee. Get this role right and the trust stays in the right hands, now and after you've gone.
Four trusts you'll hear about
Each one does a different job. The tag shows where it lands under the proposed 30% minimum tax.
Discretionary (family) trust
The trustee decides each year who gets what.
- Best for
- Family business and investment groups wanting flexibility and asset protection
- Watch
- Income splitting largely ends from 1 July 2028 if passed
Unit trust
Fixed shares (units), like a company without the company.
- Best for
- Unrelated parties co-owning a property or business
- Watch
- Must meet the new, broader “fixed trust” test to stay out
Testamentary trust
Created by your will. Only comes to life when you die.
- Best for
- Families with young children, blended families, beneficiaries at risk
- Watch
- New money added after 12 May 2026 is caught
Self-managed super fund
A trust built for one purpose: your retirement.
- Best for
- Members wanting control of investments, including business property
- Watch
- Strict rules. Money is locked until retirement.
The blueprint: keep risk away from wealth
One entity doing everything puts everything at risk. Split the business that trades from the family that owns it.
- Operating company: carries the riskRuns day to day. Signs the contracts, employs the team and wears the commercial liabilities.
- Family trust: holds the wealthOwns the company's shares, collects its profits as dividends and builds long-term investments, away from trading claims.
- Why it still works after 2028Franked dividends carry 30% company tax credits, which cover the trust's 30% minimum tax. The structure's protection value holds. The income splitting is what changes.
Your business trust is not your estate plan
The trust that suits your business is rarely the one that suits your estate. They answer different questions.
Family trustBuilt for your lifetime
Testamentary trustBuilt for after you've gone
The test: if your trust deed was drafted for the business, check whether your will needs its own structure. Most do.
The proposed 30% minimum tax
From 1 July 2028, discretionary trust income would be taxed at no less than 30%, no matter who receives it.
Bills before Parliament. Not yet law.How it works, in three steps
Trust pays first
The trustee pays 30% on the trust's taxable income before it reaches you.
You get a credit
You declare the distribution as now, and get a tax offset for the 30% already paid.
No refund
If your own rate is under 30%, the excess is lost. The offset doesn't cover Medicare levy either, so the real floor is about 32%.
What it means for the person receiving the money
The trust pays the same 30%. Who feels it depends on their own tax rate. Adult children and students on low incomes lose the most.
| Who receives it | Today | From 1 July 2028 | Impact |
|---|---|---|---|
| Adult child, uni student or retiree on low income | Tax-free threshold and low rates | 30% floor, no refund | Biggest hit |
| Spouse on a middle income (30% bracket) | 30% | About the same | Roughly neutral |
| You, on the 37% or 45% rate | Your marginal rate | Your marginal rate (offset applies) | Little change |
| Bucket company | Company rate, often 25% to 30% | 30% at the trust, no credit, then company tax again | Taxed twice |
Who's quarantined?
Not every trust is caught. Here's where the line sits in the Bills as tabled.
Outside the 30% net
- Testamentary trustsGenuine ones set up by a will, for individuals or exempt beneficiaries, funded by the estate
- Fixed trusts, including many unit trustsUnder a new, broader definition
- Deceased estates
- Super funds, including SMSFs
- Widely held trusts and managed funds
- Special disability trusts and charitable trusts
- Primary production incomeExcluded even inside a discretionary trust
Inside the 30% net
- Discretionary family trustsTrading or investment, it doesn't matter
- Distributions to bucket companiesNo credit, so tax is paid twice
- Distributions to other trustsTrust losses can't soak up income across the group
- New money in a testamentary trustAssets added after 12 May 2026 that didn't come from the estate
Already have a family trust? Three paths
Stay and pay
Keep the trust for asset protection. Accept the 30% floor. Works well if beneficiaries are already on 30% or more.
Elect out
Make an “excluded election trust” choice. You lock in fixed beneficiaries and fixed shares of income and capital. Permanently.
Restructure
Move assets into a company or fixed trust with tax-free rollover relief, available 1 July 2027 to 30 June 2030.
Which path suits you depends on your deed, your beneficiaries and your numbers. That's the part we do.
Two years sounds like time. It isn't.
One fixed fee. A clear answer on what the 30% tax means for your trust, and what to do about it.
- We review your trust deed, including who really controls it.
- We model your distributions today and from 1 July 2028.
- We compare the three paths with your numbers.
- You get a recommended path, in plain English, and a check of whether your will needs its own trust.
Fixed fee, agreed upfront. No surprises.
Strategic thinking. Financial discipline. Operational execution.
Is your trust exposed to the 30% tax?
Ten quick questions to see where your trust stands before 2028. Enter your email below and we'll send it straight away.
General information only, current at 1 November 2026. The minimum tax is a proposal before Parliament and may change before it becomes law. Figures are illustrative, rounded and based on 2028-29 individual tax rates as legislated. This page doesn't consider your circumstances. Speak with us before acting.